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| UBS posts fresh $10bn write-down | UBS posts fresh $10bn write-down |
| (about 1 hour later) | |
| The huge Swiss investment bank UBS has written off $10bn (11.2bn Swiss francs; £4.9bn) in debts linked to the sub-prime US mortgage sector. | |
| UBS had already said in October that the crisis would cost it about $3.5bn. | UBS had already said in October that the crisis would cost it about $3.5bn. |
| The firm said these losses were more than its profits last year, and it might now make an overall loss in 2007, | The firm said these losses were more than its profits last year, and it might now make an overall loss in 2007, |
| UBS also revealed that it had received a $9.7bn injection of funds from the Government of Singapore Investment Corporation. | UBS also revealed that it had received a $9.7bn injection of funds from the Government of Singapore Investment Corporation. |
| The sub-prime write-down represents more than a monetary loss for UBS - it's a serious blow to a valuable brand Robert PestonBBC business editor Read Robert Peston's blog Timeline of sub-prime losses | The sub-prime write-down represents more than a monetary loss for UBS - it's a serious blow to a valuable brand Robert PestonBBC business editor Read Robert Peston's blog Timeline of sub-prime losses |
| A Middle East investor - reported to be the Oman government - has put a further $1.7bn into the bank. | A Middle East investor - reported to be the Oman government - has put a further $1.7bn into the bank. |
| BBC business editor Robert Peston said that the fact UBS had felt the need to raise so much new capital was "all you need to know about the gravity of what has occurred, both for UBS and for the world financial system". | BBC business editor Robert Peston said that the fact UBS had felt the need to raise so much new capital was "all you need to know about the gravity of what has occurred, both for UBS and for the world financial system". |
| "It's further evidence of the transfer of financial power from the western economies to the great cash generating economies of Asia, Russia and the Middle East - which are able to dictate the terms on which they prop up our important institutions," he added. | "It's further evidence of the transfer of financial power from the western economies to the great cash generating economies of Asia, Russia and the Middle East - which are able to dictate the terms on which they prop up our important institutions," he added. |
| Hedge fund woes | Hedge fund woes |
| Announcing the fresh write-down - equivalent to its entire net profit for 2006 - UBS said that it had "revised the assumptions and inputs used to value US sub-prime mortgage related positions". | Announcing the fresh write-down - equivalent to its entire net profit for 2006 - UBS said that it had "revised the assumptions and inputs used to value US sub-prime mortgage related positions". |
| FACTS ON UBS Swiss financial institutionOperates in more than 50 countriesEmploys more than 80,000 peopleNet Profit of $9.9bn in 2006 Has about $2.6 trillion of assets invested Source: UBS | FACTS ON UBS Swiss financial institutionOperates in more than 50 countriesEmploys more than 80,000 peopleNet Profit of $9.9bn in 2006 Has about $2.6 trillion of assets invested Source: UBS |
| In October, UBS had warned that further bad debt write-downs might be necessary in the near future. | In October, UBS had warned that further bad debt write-downs might be necessary in the near future. |
| UBS chief executive Marcel Rohner and other senior managers are due to address investors and analysts on Tuesday about the bank's prospects. | UBS chief executive Marcel Rohner and other senior managers are due to address investors and analysts on Tuesday about the bank's prospects. |
| Mr Rohner replaced Peter Wuffli in the top job at UBS in July. | Mr Rohner replaced Peter Wuffli in the top job at UBS in July. |
| Although no reason was given for Mr Wuffli's departure, he left after three quarters of falling profits and $300m losses at a failed hedge fund. | Although no reason was given for Mr Wuffli's departure, he left after three quarters of falling profits and $300m losses at a failed hedge fund. |
| A string of global banks have indicated how much they have lost as a result of exposure to investment products linked to US sub-prime mortgages. | A string of global banks have indicated how much they have lost as a result of exposure to investment products linked to US sub-prime mortgages. |
| SUB-PRIME LOSSES SO FAR UBS: $13.5bn Citigroup: $11bn Merrill Lynch: $8bn Morgan Stanley $3.7bn HSBC: $3.4bnBear Stearns: $3.2bn Deutsche Bank: $3.2bn Bank of America: $3bnBarclays: $2.6bn Royal Bank of Scotland: $2.6bn Freddie Mac: $2bnCredit Suisse: $1bn Wachovia: $1.1bn IKB: $1bn | SUB-PRIME LOSSES SO FAR UBS: $13.5bn Citigroup: $11bn Merrill Lynch: $8bn Morgan Stanley $3.7bn HSBC: $3.4bnBear Stearns: $3.2bn Deutsche Bank: $3.2bn Bank of America: $3bnBarclays: $2.6bn Royal Bank of Scotland: $2.6bn Freddie Mac: $2bnCredit Suisse: $1bn Wachovia: $1.1bn IKB: $1bn |
| Source: Company reports | Source: Company reports |
| The Organization for Economic Cooperation and Development (OECD) has predicted that losses will reach $300bn. | The Organization for Economic Cooperation and Development (OECD) has predicted that losses will reach $300bn. |
| And a report by the Bank for International Settlements (BIS) has found that the credit crunch has led to sharp drop in the amount of loans offered by banks to one another. | And a report by the Bank for International Settlements (BIS) has found that the credit crunch has led to sharp drop in the amount of loans offered by banks to one another. |
| Bonds and notes worth about $296bn were issued between June and September, BIS said, less than half the amount seen in the previous quarter. | Bonds and notes worth about $296bn were issued between June and September, BIS said, less than half the amount seen in the previous quarter. |