UBS expects loss of US$3.5 billion on subprime woes

Swiss giant UBS said yesterday it will post a full-year loss of 4.4 billion Swiss francs (US$3.5 billion) this year because of its exposure to the US subprime crisis.

In the fourth quarter alone, UBS posted a net loss of SF12.5 billion, the bank said in a statement.

SUBPRIME DAMAGE

Subprime losses amount to approximately US$12 billion, with the loss of a further US$2.0 billion attributable to other aspects of the US housing market, the bank said.

The bank had already said a full-year loss was likely after dismal third-quarter results.

It will announce its results for last year in full on Feb. 14.

Meanwhile, French bank BNP Paribas, tipped as a potential suitor for scandal-hit Societe Generale, declared yesterday a record 7.8 billion euros (US$11.5 billion) in estimated net profits for last year.

In a statement, the bank -- the country's largest in terms of market capitalization -- said that it achieved its 7 percent year-on-year increase in spite of the ongoing subprime lending crisis in the US.

Fourth-quarter were put at around 1 billion euros, down 42 percent from the same period a year earlier amidst the turmoil in global credit markets.

JAPAN

In Japan, Mizuho Financial Group Inc's losses from the US subprime loan crisis could soar to ¥300 billion (US$2.81 billion) in the current financial year, reports said yesterday.

The Nikkei Shimbun said Mizuho Financial Group as a whole could suffer losses of up to ¥300 billion on securities tied to US subprime mortgage loans.

There was no immediate comment from the bank, which for the first half of the financial year had booked losses of almost ¥70 billion related to the subprime loan crisis.

Last month, Mizuho Securities said it would issue ¥150 billion worth of new shares to its parent Mizuho Corporate Bank to bolster its capital, but the reports said it might now require a further cash injection.

Mizuho Securities was forced to put off a merger with Shinko Securities Co after falling into the red because of the subprime crisis.

Other Japanese banks have also suffered subprime-related losses, although on a smaller scale than many of their overseas peers.