UBS announces largest write-down by any bank
Swiss banking giant UBS has sent shockwaves through banks by announcing the largest write-down by any bank since the onset of the credit squeeze.
As a result of the sub-prime mortgage crisis, UBS said its write-downs have more than doubled to about $37 billion (£18.5 billion).
In comparison, US banks such as Citigroup and Merrill Lynch have declared losses of $21.1 billion and $22 billion respectively.
Furthermore, Marcel Ospel, who has led the bank for the last 10 years, announced he would not stand for re-election at next month’s shareholder meeting and said I have always stated that I ultimately take responsibility for the bank’s situation.
Mr Ospel had already taken a 90% pay cut after last year’s disappointing results. In 2006, he was paid Swfr26.6 million (£13.4 million), but last year this was reduced to Swfr2.57 million.
Mr Ospel will be replaced as chairman by lawyer Peter Kurer, who has been UBS general counsel for approximately 7 years.
UBS also said it will shed more jobs, particularly at the UBS investment banking headquarters in London’s Broadgate, where hundreds of bankers have already been made redundant.
Problems in the US sub-prime mortgage market have hit the balance sheets of banks globally and have cost several leading bankers their jobs.
Shares in UBS improved and dragged most of the UK banks higher on the fact that the write-downs were larger than expected and that this could signify the end of the credit squeeze.
Broker Merrill Lynch said there was no certainty that this will be the final charge but said UBS has broken the back on its legacy write-downs.
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