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16 Sep 2008
UBS,the Swiss banking giant, has been forced to write down another $5bn (£2.79bn) in assets, on top of the $42.5bn in its sub prime-related assets written down already, and is expected to record a loss in the second half of the year.
Sub prime losses account for $1bn of the writedowns and Alt-A loans, the next lending classification after sub prime in credit terms, represent another $1bn, according to the Evening Standard.
UBS investments in bond insurers will account for the rest of the writedown. The bank has already written down $42.5bn on its sub prime-related assets and recorded a net loss of Sfr358m (£217.6m) in the second quarter.
Chairman Peter Kurer maintained the bank would be profitable from next year, likening UBS’s position to the second face in the aftermath of a bad storm: ‘One must first remove the fallen trees, then tidy up the house and cellar, and in the third phase, bring the shine back to the house’.
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Briefings
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