UBS braces for additional $5.1bn losses

UBS said yesterday that it had further losses and write-downs of $5.1 billion (Dh18.7bn) during the second quarter of 2008.

Switzerland’s largest bank said its net loss attributable to shareholders for the three months ended June 30 was 358 million Swiss francs (Dh1.2bn), compared with a profit of SwF5.5bn during the same period last year.

“The positive sentiment seen at the end of first quarter 2008 that the credit crisis may be easing was short-lived as trading conditions deteriorated significantly in the second half of May, in particular for assets related to US residential real estate as well as other structured credit positions,” a bank statement said.

The new results come on top of write-downs totalling $37.4bn over the previous nine months.

The bank said it had net new money outflows during the quarter of SwF43.8bn, compared with inflows of SwF34bn francs in the second quarter 2007.

It said that at the end of the quarter total invested assets stood at SwF2.8 trillion, 15 per cent down from the SwF3.3trn francs invested in the same quarter a year earlier.

The top Swiss bank said the number of employees declined by 2,387 people to a total of 81,452 during the quarter, with most of the reduction in the investment bank, blamed for most of the bad investments in subprime securities in the United States.

Chief Executive Marcel Rohner said UBS had already reduced risk exposure, costs and personnel of the investment bank.

“I am determined to make the management of UBS more effective,” said Rohner.