Swiss president says ailing UBS does not need government bailout

27 February 2008

LAUSANNE – UBS AG can dig itself out of massive subprime debt holdings and will not require a government bailout of the kind given to Britain’s Northern Rock despite losing billions in bad US investments, Switzerland’s president told local media Tuesday.

President Pascal Couchepin said the Zurich-based banking giant will find a way out of the crisis that saw it write down CHF15.6 billion last year and post its first full-year net loss in a decade.

His remarks were made in an interview to be published in Wednesday’s edition of the French-language weekly Bilan.

UBS is holding an extraordinary shareholder meeting Wednesday at which it will ask for approval to raise CHF13 billion from a Singapore government fund and an unidentified Middle East investor.

The proposal has angered smaller shareholders who say they are being bypassed in the recapitalization effort.

Roby Tschopp, president of Swiss shareholder group Actares, said he hoped the meeting would approve a special audit of last year’s accounts.

The bank expects up to 10,000 shareholders to attend the meeting.

UBS chairman Marcel Ospel, whose leadership has been heavily criticized, could face calls to step down. Ospel is one of three UBS board members who will stand for re-election at this year’s regular general meeting on April 23.

“I don’t think he should stay, but I’m fully aware that there is no successor yet,” Tschopp said.

UBS shares, which have more than halved in price over the past year, rose 1.5% on the Zurich exchange to close at CHF37.10.