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UBS reports huge loss after subprimes debacle

Latest update : 2008-02-14

Swiss banking giant UBS said on Thursday it had suffered a net loss of 4.4 billion Swiss francs (4.0 billion dollars, 2.7 billion euros) in 2007 after losing billions in the US mortgage crisis.

Swiss banking giant UBS said on Thursday it had suffered a net loss of 4.4 billion Swiss francs (4.0 billion dollars, 2.7 billion euros) in 2007 after losing billions in the US mortgage crisis.

The loss -- the bank's first-ever full-year loss -- compared to a profit of 12.3 billion Swiss francs in 2006 and was in line with forecasts.

"We are obliged to confirm these unacceptable results," the bank's chief executive officer Marcel Rohner told a telephone conference.

"While most of our businesses continued to be very profitable, the sudden and serious deterioration in the US housing market, in combination with our large exposure in sub-prime mortgage-related securities and derivatives, has driven us into loss for the year," he said.

In the fourth quarter alone, UBS lost 12.45 billion Swiss francs against a profit of 3.4 billion francs in the same period a year earlier.

"Last year was one of the most difficult in our history," Rohner said.

UBS has sustained severe losses due to its exposure to the US subprime mortgage crisis.

In the fourth quarter, its writedowns linked to the US housing market amounted to 13.7 billion dollars.

For the year as a whole, this exposure was 18.1 billion dollars, making UBS the third-worst hit bank after Wall Street giants Merrill Lynch (19.4 billion dollars) and Citigroup (21.1 billion dollars).

UBS said it expects 2008 to be "another difficult year" given plunging stock market values and growing fears of a recession in the United States.
 

Date created : 2008-02-14

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