More credit crunch woes for Swiss bank giant UBS

Jul 4 2008

SWISS banking giant UBS today said it would at best break even in second-quarter results as financial turmoil continues to rock the firm.

The group said results were “likely to be at or slightly below break-even” after further write-downs on investments hit by the credit crunch.

The figures would have been worse if not for a 3 billion Swiss franc (£1.5bn) tax break on its losses to date. The group has written off more than £19 billion since the crisis began last summer.

Although the group's asset management and wealth management divisions performed well, ``further market deterioration'' led to more losses in the UBS investment banking operation.

UBS has paid dearly for its exposure to complex investments linked to the crisis-hit US sub-prime mortgage market. In May the group announced plans to cut 5,500 jobs.

Like many major banking groups this year, the firm has moved to shore up its finances by calling on investors for nearly £8 billion in a rights issue, as well as selling off businesses.