Second sub-prime blow leaves UPS reeling
by David Masters
Story link: Second sub-prime blow leaves UPS reeling
Swiss bank UBS has been hit by £9.5 billion of sub-prime writedowns. This is on top of the £9 billion written off by the bank last year.
UBS is the worst hit bank in Europes credit crisis. Last year, the bank reported its first loss in its 10 year history.
Now, UBS is predicting first quarter losses in excess of £6 billion. The bank’s chairman, Marcel Ospel, has announced that he is not seeking to be re-appointed.
New shares issued by the bank are expected to raise £7.5 billion. However, the bank had been in the process of putting together a new business that would deal with U.S. property assets. According to UBS, this venture is now worthless.
Despite the setback, UBS is confident of a good recovery. In a statement, the bank said that it will continue to “focus on strengthening its core operations.”