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Business

Swiss government makes more than $1 billion on UBS stake sale

©

Text by NEWS WIRES

Latest update : 2009-08-21

The Swiss government said on Thursday that the sale of its 9% stake in banking giant UBS had garnered it more than a billion dollars profit.

AFP - Switzerland said on Thursday it made more than a billion dollars profit on selling the stake it took in its biggest bank, UBS, under an emergency rescue plan last year.

The nine percent stake valued initially at six billion Swiss francs was part of a state aid and loan package for Switzerland's banking flagship last October after it plunged deep into trouble as a result of the global financial crisis.

The government ordered the sale of its 332.2 million UBS shares late on Wednesday, marking its complete disengagement from the still loss-making UBS.

The shares were sold to Swiss and foreign institutional investors for 16.50 Swiss francs each, the ministry said in a statement, netting a profit of 1.2 billion Swiss francs (790 million euros, 1.12 billion dollars).

"By disengaging completely from UBS, the government entirely recovered its initial investment in the convertible loan to UBS," the ministry said.

"The disengagement will also yield a net profit of 1.2 billion Swiss francs," it added.

The sale was announced just hours after the United States and Switzerland signed an out of court settlement on a tax fraud lawsuit the bank was facing across the Atlantic on Wednesday.

US justice and tax authorities agreed they would give up litigation in return for UBS disclosing details of 4,450 accounts held by American clients to the US authorities.

Date created : 2009-08-20

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