USB Announces Increased Sub-Prime Writedowns
Written by admin on Tuesday, April 1st, 2008 in Business, World Economies.
Swiss financial giant USB has reported that its writedowns as a result of the sub-prime mortgage crisis have more than doubled to £18.5 billion, accounting for the biggest writedown by any bank since the global credit crunch hit.
Upon releasing the news the bank also said that current chairman Marcel Ospel would not seek re-appointment.
The writedowns include $19 billion worth of fresh assets which come on top of the $18.4 billion that was wrote off in 2007, as the value of its assets has plummeted.
The Swiss bank has also said it is seeking to raise £7.5 billion in capital which it will do by issuing new shares.
These new losses announced by the bank do however dwarf those declared by US banks Citigroup and Merrill Lynch which have declared write-offs of $21.1 billion and $22 billion respectively.
- UBS: $37.4bn
- Merrill Lynch: $22bn
- Citigroup: $21.1bn
- HSBC: $17.2bn
- Morgan Stanley: $9.4bn
- Deutsche Bank: $7.1bn
- Bank of America: $5.3bn
- Bear Stearns: $3.2bn
- JP Morgan Chase: $3.2bn
- BayernLB $3.2bn
- Barclays: $2.6bn
- IKB: $2.6bn
- Royal Bank of Scotland: $2.6bn
- Credit Suisse: $2bn
USB made the announcement as it said it expected to post a first quarter net loss of $12.1 billion.
Chairman Ospel said “I have always stated that I ultimately take responsibility for the bank’s situation” and went on to say “We have worked very hard and have been able to address the firm’s most pressing problems, thereby laying the foundation for the long-term success of the bank.”
Mr Ospel will be replaced as chairman by the current bank’s main legal adviser Peter Kurer.