Switzerland’s largest bank, UBS, is expected to announce the biggest loss in the country’s history tomorrow when it releases its results for last year, 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 percent since the summer of 2007.
For that reason, the loss of nearly 20 billion Swiss francs (US$17.2 billion) the bank is expected to announce for last year should not surprise markets, analysts said.
“The bank has already publicized its problems to a large degree and the fall in the stock price should not be so large,” a trader in Zurich said.
In November, UBS posted a net profit of SF296 million 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 tomorrow 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 SF14.1 billion and SF19.4 billion, estimates from Swiss financial news agency AWP said.
The loss for the fourth quarter alone is expected to be between SF5.9 billion and SF7.5 billion for the bank, which has already written down about US$46.9 billion in 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.
Under a rescue plan unveiled in October, the Swiss government injected SF6 billion in new capital into UBS and lent US$54 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 2007.
The bank also said last month that it would slash more jobs from its trading unit, adding to 9,000 job reductions already announced over the past year.
With its reputation tarnished, the damage only became worse when UBS went ahead with bonus payments, sparking accusations that it was misusing the rescue money.
Swiss media have reported that the payments total SF2 billion instead of the initially planned SF3 billion.
DEFENSE: The first set of three NASAMS that were previously purchased is expected to be delivered by the end of this year and deployed near the capital, sources said Taiwan plans to procure 28 more sets of M-142 High Mobility Artillery Rocket Systems (HIMARS), as well as nine additional sets of National Advanced Surface-to-Air Missile Systems (NASAMS), military sources said yesterday. Taiwan had previously purchased 29 HIMARS launchers from the US and received the first 11 last year. Once the planned purchases are completed and delivered, Taiwan would have 57 sets of HIMARS. The army has also increased the number of MGM-140 Army Tactical Missile Systems (ATACMS) purchased from 64 to 84, the sources added. Each HIMARS launch pod can carry six Guided Multiple Launch Rocket Systems, capable of
Tropical Storm Podul strengthened into a typhoon at 8pm yesterday, the Central Weather Administration (CWA) said, with a sea warning to be issued late last night or early this morning. As of 8pm, the typhoon was 1,020km east of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, moving west at 23kph. The storm carried maximum sustained winds of 119kph and gusts reaching 155kph, the CWA said. Based on the tropical storm’s trajectory, a land warning could be issued any time from midday today, it added. CWA forecaster Chang Chun-yao (張竣堯) said Podul is a fast-moving storm that is forecast to bring its heaviest rainfall and strongest
GET TO SAFETY: Authorities were scrambling to evacuate nearly 700 people in Hualien County to prepare for overflow from a natural dam formed by a previous typhoon Typhoon Podul yesterday intensified and accelerated as it neared Taiwan, with the impact expected to be felt overnight, the Central Weather Administration (CWA) said, while the Directorate-General of Personnel Administration announced that schools and government offices in most areas of southern and eastern Taiwan would be closed today. The affected regions are Tainan, Kaohsiung and Chiayi City, and Yunlin, Chiayi, Pingtung, Hualien and Taitung counties, as well as the outlying Penghu County. As of 10pm last night, the storm was about 370km east-southeast of Taitung County, moving west-northwest at 27kph, CWA data showed. With a radius of 120km, Podul is carrying maximum sustained
TRAJECTORY: The severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday, and would influence the nation to varying degrees, a forecaster said The Central Weather Administration (CWA) yesterday said it would likely issue a sea warning for Tropical Storm Podul tomorrow morning and a land warning that evening at the earliest. CWA forecaster Lin Ting-yi (林定宜) said the severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday. As of 2pm yesterday, the storm was moving west at 21kph and packing sustained winds of 108kph and gusts of up to 136.8kph, the CWA said. Lin said that the tropical storm was about 1,710km east of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, with two possible trajectories over the next one
RSS