UBS sees tough 2008, unveils new exposure
Swiss bank UBS said it expected 2008 to be a difficult year after it unveiled $26.6 billion in new exposure to risky US mortgages, but would not say if it would return to profit in early 2008 after huge losses in 2007.
UBS confirmed a profit warning issued last month, when they reported a net fourth-quarter loss of $11.3 billion, in line with analysts' forecasts.
UBS's net subprime exposure at end-December was $27.594 billion, down from $29 billion at the end of November. But the bank unveiled an additional $26.6 billion in exposure to so-called Alt-A mortgages, which are of higher quality than subprime loans but also considered risky.
The bank took a $2 billion charge on exposure to the Alt-A mortgages. UBS also took a charge of $871 million on credit protection bought from monoline bond insurers.
Some analysts had predicted that huge write-downs, running to $18.4 billion, by UBS on its subprime exposures would frighten away wealthy clients.
UBS Chief executive Officer Marcel Rohner told journalists in a conference call that the bank continued to reduce exposure in January, but declined to make a forecast for first quarter results, saying market conditions were particularly challenging. (Reuters)
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