Русская версияThe Swiss bank giant UBS is reeling from a series of blows,
including it's exposure to the US subprime mortgages.
The troubled
bank has announced a loss of 221 million euros ($330 million)
in the second quarter of 2008 and further write downs of 3.1
billion euros. While not as damaging as the first quarter losses,
the new figures are still worse than expected by UBS
management.
The bank also announced plans to split up its business divisions
into three autonomous units, with staff bonuses to be aligned to
each unit's financial results.
The bank said the new strategy would make UBS "more effective and
agile in managing trends in the financial industry."
A review of the bank's operations had revealed several weaknesses
in the "one firm" business model, USB chairman Peter Kurer said.
"Some of the theses weaknesses -- such as the blurring of the true
risk-reward profile of individual businesses -- are the source of
substantial risk, as we have seen in the past few months," he said.
A once reliable bank
Once among the most well regarded Swiss banks, UBS' reputation has
suffered in the past 12 months and an increasing number
of customers have taken their business elsewhere. Over the
past year, UBS shares lost 66 percent of their value.
Yvan Lengwiler, a banking analyst at Basel University, said he
believes UBS management will struggle to regain customers'
confidence.
"There were grave management errors at the very top, and
inappropriate risk management which is of course the biggest sin a
bank can do," Lengwiler told DW-RAIDO. "The reputation is damaged,
and it will take a great deal of effort to get this back."
The bank said it did not expect to see any improvement in the
adverse economic and financial market trends this year. It would
therefore continue to cut costs, risks and jobs. USB currently
counts among Switzerland's key employers.
(Deutsche Welle)
more info >>
<< Back