UBS in financial trouble
by Kay Murchie
There are reports that UBS may have hit financial difficulty and investors are awaiting news from the bank on the size of its exposure to sub-prime mortgages.
Yesterday, Swiss-based UBS, which has a major presence in the US, saw its shares briefly suspended after a sudden crash. By noon, they were down 3% at Swfr49 in Zurich. Analysts forecast that UBS could be forced to write off $9 billion, a figure which UBS has denied.
A spokesperson for the bank insists that it will be profitable in the last quarter, however, this result that ‘isn’t compatible’ with the alleged losses. The spokesperson added that the temporary share suspension was ‘automatic’. If you have a very strong fall between two bids, it’s stopped automatically so that other market makers can come in again.
Back in October, UBS announced that it was cut 1500 jobs by Christmas after huge losses sparked by the sub-prime mortgage crisis in the US pushed it into its first loss for 9 years.
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