(LONDON) UBS AG, Europe’s biggest bank by assets, declined to the lowest level in almost five years in Swiss trading after Credit Suisse Group said the company faces further writedowns from ‘troubled’ assets.
‘Further writedowns appear likely and could be large,’ analyst Daniel Davies said yesterday in a research note. ‘Taking more pessimistic assumptions in order to estimate what losses could be incurred in actually selling this portfolio,’ writedowns from UBS’s ‘problem portfolio,’ including sub-prime investments, may total 15.5 billion francs (S$20.8 billion), Mr Davies said.
UBS lost as much as 5.1 per cent to 32.64 francs, the lowest price since May 2003.
The bank was down 4.2 per cent to 32.92 francs at 9:41am Swiss time, extending its 2008 decline to 37 per cent.
Last week, UBS chairman Marcel Ospel, facing calls for his resignation, won support at a shareholders meeting for the Zurich-based bank’s plan to replenish capital by selling convertible bonds to shareholders in Singapore and the Middle East.
Since the beginning of 2007, more than 45 of the world’s biggest banks and securities firms have taken about US$181 billion in asset writedowns and credit losses, including reserves set aside for bad loans.
Source: Bloomberg (Business Times 4 Mar 08)