Swiss bank UBS confirmed on Tuesday it had posted a net loss of CHF 2 billion ($1.76 billion) on the back of yet more writedowns on illiquid assets and said it remained cautious.
UBS said losses were driven by writedowns on risk positions, in particular CHF 1.9 billion on monolines, and by losses at its investment bank. “The markets continue to be unsettled, and we remain cautious on the immediate outlook for UBS,” the world’s largest wealth manager said in a statement.
CEO Oswald Gruebel, the former Credit Suisse chief who has been pulled out of retirement to bring UBS back to profit, had warned on UBS’ first quarter profits on April 15.
Gruebel said the same day that the bank was still facing an uncertain future and announced 8,700 job cuts in a bid to speed up UBS’ long due restructuring and slash costs. The loss contrasts with competitor Credit Suisse’s Q1 net profit of CHF 2 billion.
Risky investments by UBS’s investment bank in complex US financial products have forced Switzerland’s largest bank to make more than $50 billion in writedowns.
The bank had to turn to the Swiss government for help in October and is also at the centre of a US investigation into possible tax fraud, which is attracting negative headlines in the United States.
In October, Berne gave the bank a cash injection of CHF 6 billion and the Swiss National Bank agreed to absorb in a special fund some of UBS’ toxic assets that now amount to $40 billion. (Reuters)