UBS head to step down as losses continue
Ospel will not seek re-election in coming weeks, while Swiss biggest bank will raise further capital of CHF 15 billion as a result of unexpected losses.1 April 2008
ZURICH - Switzerland's biggest bank announced it would raise further capital on Tuesday as a result of worse losses than expected resulting from the sub-prime mortgage crisis.
The bank predicted further losses of CHF 12 billion (USD 12 billion) in the first quarter of 2008 after losses and write downs of approximately CHF 12 billion (USD 19 billion) as a result of the US home loans crisis.
The bank, one of the worst hit, announced it intended to raise a further CHF 15 billion and that chairman Marcel Ospel would not seek re-election at the AGM on April 23.
If shareholders accept the move, UBS will raise the extra capital in an underwritten rights issue.
Marcel Rohner, chief executive officer of UBS said in a statement the bank had made further prompt writedowns and reduced risk weighted assets to allow UBS to return to "sustainable value creation over time."
He added: "With these measures we have created the basis to weather one of the most difficult periods in the history of the industry."
Shareholders have already agreed to a cash injection of CHF 13 billion from the Government of Singapore Investment Corporation (CHF 11 billion) and from an unnamed Middle East investor (CHF 2 billion) to help out the troubled bank.
[Copyright dpa 2008]
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