UBS claims £1.47bn tax credit on sub-prime losses

UBS announced that it will ‘break-even’ in its results for the second

The bank, which will release its results next month for the period ended June
30, said it will however make a small loss.

UBS was expected to report losses 5bn Swiss francs but it said that a 3bn
Swiss franc tax credit would offset further losses in its investment banking

‘The results reflect positive contributions from Global Wealth Management
& Business Banking and from Global Asset Management, offset by a loss in the
Investment Bank. Further market deterioration led to writedowns and losses on
previously disclosed Investment Bank risk positions, in particular credit
valuation adjustments on monoline insurance exposures.

‘Write-downs were mitigated by continued exposure reductions and by hedge
benefits. In connection with the losses to date, the second quarter results
include a tax credit of approximately CHF 3 billion,’ the bank said in a

UBS expects its Tier 1 capital ratio to be approximately 11.5%, and has no
need to raise new equity.

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