UBS posts record Swiss loss
Switzerland’s biggest bank cuts 2,000 jobs and posts the largest loss in Swiss corporate history.GENEVA - Switzerland's biggest bank UBS on Tuesday said it lost about CHF 20 billion (USD 17 billion, EUR 13 billion) in 2008, the largest full-year loss in Swiss corporate history, as it announced that it would cut another 2,000 jobs.
Full year loss in 2008 reached CHF 19.697 billion, with CHF 8.1 billion worth of losses incurred during the last three months of the year.
The bank, which is one of the worst-hit globally by the United States subprime home-loan crisis and the resulting financial market fallout, said more jobs would be cut in 2009 at its investment bank unit, which was responsible for most of the damage sustained by the bank.
After posting its second consecutive full-year loss, the bank's chief executive officer Marcel Rohner repeated a projection made earlier that the bank would be profitable in 2009.
He said the bank had "an encouraging start" in 2009, with inflows of assets at its wealth management and asset management units.
"We have had positive net new money in January and an encouraging start into the year. That also refers to trading in investment bank", chief executive officer Marcel Rohner told journalists.
Restricting a loss of assets was a key concern at the bank, as clients withdrew a net CHF 83.6 billion worth of assets in the third quarter and CHF 85.8 billion worth in the last three months of 2008.
"Overall net new money outflows were particularly heavy in October, but slowed down progressively in November and December", said the bank.
However, the bank warned that it remained "cautious" and that it would continue to cut costs and risks.
It announced another 2,000 job cuts in its investment banking unit on Tuesday, bringing the total job losses since October 2007 to 11,000.
"Financial market conditions remain fragile as company and household cash flows continue to deteriorate. On the other hand, governments are taking very substantial measures to ease fiscal and monetary conditions", the bank noted.
"Our near-term outlook remains cautious, and UBS will continue its programme to strengthen its financial position through reductions in risk positions, risk weighted assets, total assets and operating costs", it added.
An icon of Swiss banking, UBS experienced two very unstable years, with billions in losses that forced it to take on an emergency state aid package worth almost USD 60 billion late 2008.
[AFP / Expatica]