UBS relieved of USD 16.4 billion risk

ZURICH – The Swiss central bank said on Friday that it had relieved the biggest Swiss bank UBS of dud assets worth USD 16.4 billion (CHF 18 billion) in the first slice of relief totalling almost USD 60 billion.

"UBS transferred 2,042 securities positions in the equivalent amount of USD 16.4 billion" to SNB StabFund, the special purpose vehicle created by the Swiss National Bank to hold these illiquid assets, the bank said in a statement.

The price of these positions reflects their value on 30 September 2008, the SNB said.

Switzerland’s biggest bank UBS has lost billions of dollars in the United States subprime home loan crisis and the ensuing financial turmoil. It has already written down about USD 46.9 billion’ worth of assets.

Under the state rescue plan unveiled in October, the Swiss government injected CHF 6.0 billion in new capital to UBS, and lent USD 54 billion to the bank to transfer its non-liquid assets into the separate fund set up by the SNB.

The fresh capital gives the Swiss government a 9.3-percent stake in UBS.

[AFP / Expatica]