UBS records multi-billion Q4 and annual losses

by Richard Kilner

Story link: UBS records multi-billion Q4 and annual losses

Swiss investment bank UBS has posted a fourth quarter loss of CHF 8.1bn, with adjusted pre-tax operating results of -CHF 2.8bn.

For the full-year 2008 UBS recorded a loss of CHF 19.7bn, largely due to losses incurred from risks in investment banking.

The fourth quarter of last year also saw the bank make substantial moves to reduce its risk, with the remaining exposure contributing to multi-billion losses in Q4.

Risk-weighted assets (Basel II) fell by 9% in Q4 to just over CHF 300bn, with a tier 1 ratio of 11.5% and a capital adequacy ratio of 15.5%.

In an effort to reduce costs personnel expenses fell by 41% on a quarterly basis and on an annual comparison by 36%, with over 1,700 reductions in personnel during Q4.

The Swiss National Bank, Switzerland’s central bank, in October reached an agreement with UBS to take on some US$60bn of assets in order to reduce the bank’s balance sheet risk.

Although the bank’s position is clearly sub-optimal, it is not the only such institution facing troubles ahead.

British banks RBS and HBOS have had to be rescued by the British Government, and Germany’s biggest bank Deutsche Bank has recorded pre-tax losses of €5.7bn.