UBS Faces Further $5 Bln Writedowns - Report
By Daniel at 14 September, 2008, 12:39 pm
UBS Faces Further $5 Bln Writedowns - Report
Last Update: 9/14/2008 10:01:28 AM
ZURICH (AFP)–Switzerland’s biggest bank UBS AG (UBS) is set to write down a
further $5 billion in assets amid continuing financial turmoil, Swiss weekly
SonntagsZeitung reports Sunday.
The bank will post the loss in the second half of the year and is likely to
inform markets just before its extraordinary general meeting Oct. 2, the paper
says without citing its sources.
Subprime losses will account for $1 billion worth of the writedowns, while Alt-A
loans - made to borrowers one step up from subprime in credit terms - will yield
another $1 billion in losses.
Investments in monoline insurers - a form of bond insurance - will result in $2
billion of writedowns and student loans the remaining $1 billion, the paper says.
One of the banks worst hit by the subprime crisis, UBS has written down some
$42.5 billion on its subprime-related assets.
For its second quarter, it posted a net loss of 358 million Swiss francs, but the
bank’s chief insisted last month it would still return to profitability next
year.
“We will be profitable again in 2009,” Kurer said in an interview with Swiss
Sunday newspaper NZZ am Sonntag.
Kurer said the situation faced by the bank could be compared to the aftermath of
a severe storm.
“One must first remove the fallen trees, then tidy up the house and cellar, and
in the third phase, bring the shine back to the house,” he said, adding that he
believes the bank to be now in the second phase.
UBS declined to comment on the SonntagsZeitung story Sunday.
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