Coming up

Don't miss




Gilles Kepel, Islamic and Arab world specialist

Read more


Argentina braced for another debt default

Read more


Too Late for Sanctions? Pressure Mounts on Russia over Ukraine (part 2)

Read more


Too Late for Sanctions? Pressure Mounts on Russia over Ukraine

Read more


'What would you do?'

Read more


Ebola virus: Liberia shuts most border points

Read more


Netanyahu says Gaza operation will not end quickly

Read more


As France’s Carrefour pulls out, what next for India’s retail market?

Read more

#TECH 24

Internet of Things

Read more

  • Israeli strikes target symbols of Hamas power

    Read more

  • US says Russia violated arms treaty by testing cruise missile

    Read more

  • Argentina in last-ditch effort to avert default

    Read more

  • Karzai’s cousin killed in Afghan suicide attack

    Read more

  • Libya oil tanker fire blazes out of control

    Read more

  • In pictures: From Gaza to Mosul, bittersweet end of Ramadan for Muslims

    Read more

  • France offers asylum to Iraqi Christians

    Read more

  • Moroccan police arrest French al-Qaeda recruiter

    Read more

  • Israel warns of ‘prolonged’ campaign in Gaza

    Read more

  • French mayor files complaint against US father who risked kids’ lives on Mont Blanc

    Read more

  • French footballer Griezmann headed to Atletico Madrid

    Read more

  • Luc Besson’s sci-fi thriller ‘Lucy’ tops US box office

    Read more

  • Video: Slaviansk mourns mass grave victims

    Read more

  • France honours those lost on Air Algérie Flight AH5017

    Read more

  • Video: Ethiopia turns to wine to boost image, economy

    Read more


UBS to announce record €13.3 billion loss

Latest update : 2009-02-08

Switzerland's largest bank is expected to cap a ghastly year on Tuesday by announcing a record €13.3 billion loss for 2008. UBS has seen its share value plunge 82% and has shed over 9,000 jobs since the beginning of the subprime crisis.

AFP - Switzerland's largest bank, UBS, is expected to announce the biggest loss in the country's history when it releases Tuesday its results for 2008, a year that saw the national icon tarnished by the subprime crisis.

But if there is a silver lining for the bank, which has been the target of a huge state rescue package, it lies in the fact that analysts say UBS has now hit bottom after its stock price fell 82 percent since the summer of 2007.

For that reason, the loss of nearly 20 billion Swiss francs (13.3 billion euros, 17.2 billion dollars) the bank is expected to announce for 2008 on Tuesday should not surprise markets, analysts say.

"The bank has already publicised its problems to a large degree and the fall in the stock price should not be so large," said a trader in Zurich.

Last November, UBS posted a net profit of 296 million Swiss francs for the third quarter following a year of losses, but warned that a renewed loss was looming for the following quarter.

The numbers expected to be unveiled Tuesday are staggering, reflecting the fact that UBS was one of the banks hardest hit by the US subprime loan crisis.

Its annual net loss is believed to be between 14.1 and 19.4 billion Swiss francs, according to estimates from Swiss financial news agency AWP.

The loss for the fourth quarter alone is expected to be between 5.9 billion and 7.5 billion Swiss francs for the bank, which has already written down about 46.9 billion dollars' worth of assets.

"The fourth quarter was clearly difficult for UBS," a Deutsche Bank commentary said, adding however that removing "toxic" non-liquid assets with help from the Swiss central bank along with restructuring efforts meant "UBS has passed the worst".

Customer confidence in the bank has in turn taken a hit, posing a major problem for UBS, which has hemorrhaged capital as a result. Customers pulled some 83.6 billion from the bank in the third quarter.

Under a rescue plan unveiled in October, the Swiss government injected 6.0 billion francs in new capital to UBS and lent 54 billion dollars to the bank to transfer its non-liquid assets into a separate fund.

The massive spread of so-called "toxic" assets -- mainly linked to financial instruments now worth very little because of the US home-loan crisis -- throughout the global banking system is at the core of the crisis since it broke in August of 2007.

The bank also said in January that it would slash more jobs from its trading unit, adding to 9,000 job reductions already announced over the past year.

With its reputation tarnished, the damage only became worse when UBS decided to go ahead with bonus payments, sparking accusations that it was misusing the rescue money.

Swiss media have reported that the payments total two billion Swiss francs instead of the initially planned three billion.

As a result of the controversy, the bank has found itself caught between employees threatening legal action if the bonuses are not distributed and public opinion firmly against the payments.

Last month, the facade of UBS's headquarters was bombarded with coloured paint bombs.

On top of those concerns, the bank is bogged down in legal troubles in the United States, where it has faced an investigation into whether it helped customers dodge taxes.

German bank WestLB estimates that 1.5 billion will have to be spent to settle the dispute.

Date created : 2009-02-08