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GENEVA: Switzerland's biggest bank UBS on Tuesday said it lost about 17 billion dollars (13 billion euros) in 2008, the largest full-year loss in Swiss corporate history, as it announced that it would cut another 2,000 jobs.
Full year loss in 2008 reached 19.697 billion Swiss francs, with 8.1 billion francs worth of losses incurred during the last three months of the year.
The bank, which is one of the worst-hit globally by the United States subprime home-loan crisis and the ensuing financial market fallout, said more jobs would go this year at its investment bank unit, which was responsible for most of the damage incurred by the bank.
After posting its second consecutive full-year loss, the bank's chief executive officer Marcel Rohner reiterated a projection made earlier that the bank would be profitable in 2009.
He said the bank has had "an encouraging start" this year, with positive inflows of assets at its wealth management and asset management units.
"We have had positive net new money in January and an encouraging start into the year. That also refers to trading in investment bank," Rohner told journalists during a conference call.
Stemming a haemorrhage of assets has been a key concern at the bank, as clients withdrew a net 83.6 billion francs worth of assets in the third quarter and 85.8 billion worth in the last three months of the year.
"Overall net new money outflows were particularly heavy in October, but slowed down progressively in November and December," said the bank.
However, the bank warned that it remained "cautious" and that it would continue to cut costs and risks.
It announced another 2,000 job cuts in its investment banking unit on Tuesday, bringing the total job losses since October 2007 to 11,000.
"Financial market conditions remain fragile as company and household cash flows continue to deteriorate. On the other hand, governments are taking very substantial measures to ease fiscal and monetary conditions," the bank noted.
"Our near-term outlook remains cautious, and UBS will continue its programme to strengthen its financial position through reductions in risk positions, risk weighted assets, total assets and operating costs," it added.
An icon of Swiss banking, UBS has experienced two very turbulent years, with billions in asset writedowns and losses that forced it to take on an emergency state aid package worth almost 60 billion dollars late last year.
Full year loss in 2008 reached 19.697 billion Swiss francs, with 8.1 billion francs worth of losses incurred during the last three months of the year.
The bank, which is one of the worst-hit globally by the United States subprime home-loan crisis and the ensuing financial market fallout, said more jobs would go this year at its investment bank unit, which was responsible for most of the damage incurred by the bank.
After posting its second consecutive full-year loss, the bank's chief executive officer Marcel Rohner reiterated a projection made earlier that the bank would be profitable in 2009.
He said the bank has had "an encouraging start" this year, with positive inflows of assets at its wealth management and asset management units.
"We have had positive net new money in January and an encouraging start into the year. That also refers to trading in investment bank," Rohner told journalists during a conference call.
Stemming a haemorrhage of assets has been a key concern at the bank, as clients withdrew a net 83.6 billion francs worth of assets in the third quarter and 85.8 billion worth in the last three months of the year.
"Overall net new money outflows were particularly heavy in October, but slowed down progressively in November and December," said the bank.
However, the bank warned that it remained "cautious" and that it would continue to cut costs and risks.
It announced another 2,000 job cuts in its investment banking unit on Tuesday, bringing the total job losses since October 2007 to 11,000.
"Financial market conditions remain fragile as company and household cash flows continue to deteriorate. On the other hand, governments are taking very substantial measures to ease fiscal and monetary conditions," the bank noted.
"Our near-term outlook remains cautious, and UBS will continue its programme to strengthen its financial position through reductions in risk positions, risk weighted assets, total assets and operating costs," it added.
An icon of Swiss banking, UBS has experienced two very turbulent years, with billions in asset writedowns and losses that forced it to take on an emergency state aid package worth almost 60 billion dollars late last year.
http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_335742.html
ZURICH - SWITZERLAND'S largest bank, UBS, is expected to announce the biggest loss in the country's history when it releases on 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 per cent since the summer of 2007.
For that reason, the loss of nearly 20 billion Swiss francs (S$25 billion) 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 Swiss francs 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 US$54 billion (S$80 billion) 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. -- AFP