UBS confirms Q1 loss of $1.75 bn

May 5th, 2009 - 2:43 pm ICT by IANS  

Zurich, May 5 (DPA) The Swiss banking giant UBS confirmed Tuesday it lost nearly 2 billion francs ($1.75 billion) in the first quarter of this year, mostly on exposure to risky positions and continued outflow of capital.
UBS said in a statement that the losses were on positions the bank was exiting or had already closed.

Net new money outflows totalled 39.6 billion francs at the wealth management in Switzerland and the Americas. Outflows in global asset management reached 7.7 billion francs, which UBS saw as a positive slow-down.

Last month, Chief Executive Officer Oswald Gruebel predicted the bank would report such losses and also announced 8,700 job cuts, in an effort to cut costs.

“We remain cautious on the immediate outlook for UBS,” Gruebel said in a statement, adding that while investors seemed less risk averse in the first quarter, credit markets were still in a crunch.

“The real economy has continued to deteriorate, and this is expected to have negative implications for credit-related provisioning in coming quarters,” he said.

Gruebel was pulled out of retirement to run the bank. He used to head Credit Suisse, UBS’s main competitor, which reported a 2 billion franc profit this quarter.

Last year, UBS lost nearly 21 billion francs, the most ever for a Swiss company, after writing down nearly $50 billion in assets, the most by any European bank during the financial crisis.

UBS took a capital injection of over $5 billion from the government. It then moved a total volume of assets of $38.7 billion of illiquid assets to a stabilisation fund set up by the Swiss central bank and government.

The bank remains involved in litigation in the US on tax fraud allegations.

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