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.
A signaling system malfunction disrupted high-speed rail (HSR) services beginning at 8am today, with trains temporarily reduced to three northbound and three southbound trains per hour as authorities conduct inspections. The malfunction occurred on a section of track in Miaoli County during pre-operation checks early this morning, forcing northbound and southbound trains to use a single track, the HSR operator said. The regular schedule has been replaced with three hourly trains offering only nonreserved seating in each direction, stopping at every station, it said, adding that business class cars would still have reserved seating. Departures from terminal stations are scheduled at the top
Taiwan is still in the process of assessing the possibility of recruiting workers from Eswatini, the Ministry of Foreign Affairs said yesterday, adding that its goal is to help Eswatini upgrade its vocational training centers. If there are plans to recruit workers from Eswatini, safeguarding national security, protecting public health and ensuring the employment rights of Taiwanese would be prerequisites, Department of West Asian and African Affairs Director-General Yen Chia-liang (顏嘉良) told a news conference. Key considerations would also include filling labor shortages in specific industries, and fostering bilateral professional and technical exchanges, he said. Yen was asked about the progress of labor
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
A US uncrewed surface vessel (USV) encountered multiple Chinese warships during an autonomous transit of the Taiwan Strait, US defense company Seasats said in a statement on Wednesday. Seasats announced that a Lightfish USV had completed the first autonomous transit of the Taiwan Strait. Over five days, the USV traversed the entire length of the Strait while constantly monitoring surface vessel traffic, the company said. The Lightfish encountered multiple Chinese warships, one of which was a Chinese People’s Liberation Army Navy (PLAN) Type 056 corvette, it said. The Chinese vessels were operating “well within Taiwan’s exclusive economic zone without transmitting their identity via the
RSS