Just when you thought only U.S. financial institutions were in deep trouble, Switzerland’s largest bank UBS AG (NYSE: UBS, stock. VTX: UBSN) dropped another bombshell when it said it expected to post first-quarter net losses of a mind-boggling $12 billion and would seek $15 billion in new capital due to exposure in U.S. subprime mortgage. UBS AG is seeking writedowns of $19 billion putting its total writedowns since 9-month ago at a whopping $40 billion – the largest by a bank so far.
It was reported that more heads will be chopped by the bank as a result of the losses. The latest losses by the Zurich-based 
UBS also mean its chairman Marcel Ospel is stepping down to be succeeded by another 58-year-old general counsel Peter Kurer. Prior to this, others who lost their jobs were former CEO Peter Wuffli, finance chief Clive Standish and investment banking head Huw Jenkins.
Although UBS shares rose 1.82 francs to 30.68 francs by 10 a.m. in Zurich, the stock has fallen 41 percent this year, cutting the bank’s market value to 63.7 billion francs and making UBS the second- worst performer on the 60-member Bloomberg Europe Banks and Financial Services Index. Analysts had expected the bank to write down an additional 10-20 billion francs in 2008. Earlier on the same day German’s largest lender, Deutsche Bank, said it expected a first-quarter loss of about €2.5 billion, or $3.9 billion, on write-downs of the same old U.S. real estate loans and assets crisis.
As of now the global banks have written down more than $200 billion of soured loans after the explosion of U.S. subprime mortgage crisis. This is the game for the big boys – high risk high gain. Therefore take it with pride Mr. UBS, as not every banks could incur such huge losses *grin*.
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April 1st, 2008 by financetwitter
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