UBS may reduce available credit
The Swiss banking giant confirms Tuesday a CHF 2 billion loss in the first quarter of 2009.ZURICH - Swiss banking giant UBS warned Tuesday it may make reduce available credit in the coming quarters due to the economic crisis, as it confirmed a CHF 2 billion (EUR 1.32 billion, USD 1.77 billion) first quarter loss.
"The real economy has continued to deteriorate, and this is expected to have negative implications for credit-related provisioning in coming quarters," said the bank in a statement detailing its first quarter losses.
UBS chief financial officer John Cryan said the bank is exposed to credit in two divisions -- its investment bank as well as corporate financing extended to companies in Switzerland.
"There was a general sense that there was a deterioration in corporate credit," he told journalists, adding that some of the provisions currently set aside relate to loans extended to small and medium-sized companies in Switzerland.
"What we're flagging is that the Swiss economy is slowing down... and the negative effect has yet to make itself visible in our reported accounts," he said.
While market sentiments improved in the first three months of 2009, trading in complex financial products remained illiquid, added the bank in a statement.
UBS already indicated that it expected a CHF 2 billion loss for the first quarter in April, when it also said it would cut 8,700 jobs to cut costs.
The bank, Switzerland's biggest, struggled to recover after losing billions in the financial crisis.
AFP / Expatica