Subprimes Push UBS to First Annual Loss

ZURICH, Switzerland — UBS AG on Thursday posted a fourth-quarter net loss of $11.28 billion, and a loss for the entire year, besieged as other banks were by investments in U.S. subprime mortgages.

Still holding $27.59 billion in securities linked to the subprime residential mortgage market, UBS said it expects more problems in 2008.

Shares plunged 8.3 percent to 37.46 francs ($33.93) in Zurich.

Switzerland's largest bank posted its first full-year net loss since 1997, when it was created out of two major Swiss lenders.

The fourth-quarter loss of 12.45 billion Swiss francs, in line with the bank's forecast at the end of January, compared with a net profit of 3.4 billion francs in the same period of 2006.

The net loss for the full year was 4.38 billion francs ($3.97 billion), compared with a profit of 12.26 billion francs in 2006.

"Last year was one of the most difficult in our history," said Chief Executive Marcel Rohner. "While most of our businesses continued to be very profitable, the sudden and serious deterioration in the U.S. housing market, in combination with our large exposure in subprime mortgage-related securities and derivatives, has driven us into (a) loss for the year."

The bank added in a statement: "UBS expects 2008 to be another difficult year."

Analysts said the assessment was unsurprising but nonetheless discouraging.

"We still think further writedowns are likely in at least the first quarter, further impairing confidence and raising the risk of market share losses," Deutsche Bank analyst Matt Spick said.

The losses have resulted in spiraling write-downs totaling $18.4 billion so far and have forced UBS to seek 13 billion francs ($11.8 billion) in fresh capital from Singapore's government fund and an unnamed Middle East investor.

UBS has fired a number executives, including Chief Executive Peter Wuffli, investment banking head Huw Jenkins and financial chief Clive Standish. Its shares have slumped 22 percent already this year on fears of even greater losses.

Analysts said they were reassured that UBS appears to be reducing its holdings of toxic securities. The $27.59 billion in securities revealed Thursday is down from $38.77 billion reported in September.

Net new money inflows _ a closely watched gauge of future revenue _ was positive thus far in 2008, Rohner said during a conference call.

Comments

[mamacat]

The worst year, in the worst presidency, in the entire history of the United States. That really is saying something.

[realitytrumpsbull]

Well I guess it kind of sucks to be the chairman and CEO or whatever of the Global Slumlord's Association these days...

[Justinpassing]

kinda like when Hillary invested 2000 and 9 months later bagged 18K off poultry futures.

[americaforme]

While the banks get help from everywhere, struming their woes on bank gitars,the same poor us...America's new homless, credit card debters at 32% interst. Bite there fingernails waiting for the wolves to pounce, shreding what ever is left... The genius who made financials the perfect fast money to investers, should pay up not the USA.

[loki]

Im sure our Capitalist at all cost , Corporate owned Government will find it in their hearts to help any and all large corporations who might have lost money through stupid acts of their own. After all, what are tax payers for..

[vippy]

Well, I see the Bush Tax Cuts are working just fine, more homeowners, booming economy, what more can we ask for? Pretty soon, Bernanke and his ilk cannot lie themselves out of this.
Reverse the tax cuts and reign in the future's markets on oil along with their hedge funds and
we should get life put back into our economy!

[geobushono]

you been in business 10 years and THIS is your first loss?...try a small business where you might not make a penny for 5 years.

...And we're all sorry that bankers everywhere were happy to fuck OUR underclass and chose not get out, but stuck around for seconds and it killed 'em.....Karma.

[FrictionSoul]

They've been in business for 10 years since two companies merged to become UBS.

I agree: the mortgage lenders were only too happy to screw over everybody. It's not UBS's and other banks fault. It's the mortgage lenders who started this mess.

Know what's worse? They've written off these losses but still expecting people to pay. That's right, they've charged these off and still sticking it the people they suckered into this, and not just underclass, but upper middle class too who thought they could make money by buying a bigger or second house.

[Wiredwilly]

It would seem the Bush " stimulus " package should cover the UBS loss nicely.
When the Fed prints another $145,000,000,000 in " fica" dollars, the Fed will collect the interest on that money from United States taxpayers and put it into UBS.
The amount the Fed receives from U.S. Citizens in interest on the " stimulus package" should approximately equal the amount UBS lost, about $11 Billion. So a cynic might argue the " stimulus" check was not designed to help the U.S. Citizen at all, but to force U.S. Citizens to pay back the UBS losses.

[bushisanAhole]

The losses are just starting. There are millions more people on the brink of foreclosure and it won't take much more of this economy to make this a whole lot worse.

[mrcontinental]

"Shares plunged 6.1 percent to 38.36 francs ($34.75) in Zurich."

Might be time to buy on this one. No way in hell they are going under.

"Still holding $27.59 billion in securities linked to the subprime"

Uh...then again I may just wait a bit longer.

[WIpatriot]

UBS: You and US.

[almoguy]

Queue the violins!

[VivaZapata]

UBS lost, what for small investor me was, lots of money. Never trust these creeps. Do your own financial planning and use Etrade, or whatever gives you the best transaction. It's worth the time spent. The brokers look out for their big clients and their own interests. Have you ever gone to the butcher and got a piece of meat loaded with fat and grizzle? The rich guy who gives that same butcher a big tip doesn't get that piece of meat. Get it?