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Friday, June 26, 2009

UBS to sell $3.5bn of new shares

BBC News

Switzerland's biggest bank, UBS, is to raise 3.8bn Swiss francs ($3.5bn; £2.1bn) of capital by selling shares.The bank also said it would make a loss in the second quarter of the year, after making a 2bn Swiss franc loss in the first three months of the year.

The share issue will "help reinforce confidence in UBS and the place of Swiss finance", UBS said. The bank was hit hard by writedowns on its toxic assets and client withdrawals from its wealth management units.

It plans to sell about 293 million new shares at 13 Swiss francs each. UBS lost 20.9bn francs in 2008, the largest loss made by a Swiss company.

The Swiss government had to bail out UBS last year with 6bn Swiss francs and the Swiss central bank has agreed to absorb some of its bad debt. The company has cut almost 20,000 jobs since 2007.

The bank's loss contrasts with the reviving fortunes of competitor Credit Suisse, which reported a net profit of 2bn Swiss francs for the January-March quarter.



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