RSS Feed
July 31st, 2012 
FAKE NEWS for the Zionist agenda GENEVA (AP) — Shares in UBS plunged after the Swiss banking giant posted a worse-than-expected 58 percent fall in second-quarter profits Tuesday due to losses from the Facebook stock listing and a downturn at its investment banking division.
Switzerland’s largest bank said the drop in profits to 425 million francs ($434.16 million) from 1.02 billion Swiss francs ($1.2 billion) a year earlier reflects “challenging conditions marked by increased volatility and greater client caution.”
The Zurich-based bank missed analysts’ estimates for more than 1 billion francs in profit, and its shares fell 5.9 percent to 10.29 francs ($10.52) Tuesday.
UBS AG incurred a 349 million francs loss due to problems executing electronic trades on the day of Facebook’s listing on the Nasdaq exchange in May. That pushed the investment banking unit to a pretax loss of 130 million francs for the second quarter.
Because of those technical errors, which gave UBS more shares than its clients ordered, the bank said it will take unspecified legal action against Nasdaq to recoup the losses.
“We will take appropriate legal action against Nasdaq to address its gross mishandling of the offering and its substantial failures to perform its duties,” the bank said.
Chief Executive Sergio P. Ermotti, who is cutting the investment bank’s size by more than half, told investors in a statement that going forward UBS will focus more on wealth management to comply with the need for greater capital cushions. He said the bank would continue to focus on “prudent liquidity management, further reducing risk-weighted assets and delivering the best possible service to our clients.”
The bank said it had surpassed requirements to increase its capital cushion and prudently cut costs that should lead to better results by the end of 2013. UBS said it plans to boost capital by 15.3 billion francs this year to comply with the urgings of the Swiss central bank.
It also said it was continuing to reduce its exposure to risky assets by 45 billion francs in the second quarter, following recent scandals such as a $2 billion loss attributed to a former London trader accused of fraud. The bank now plans to reduce its exposure to 270 billion francs of such assets by 2013.
UBS is cutting about 3,500 jobs, and had 63,520 staff at the end of June.
Its outlook remained cautious, however, because of Europe’s sovereign debt crisis and the gloomy world economic outlook, even as it expressed confidence that it would continue to attract net new assets.
“Failure to make progress on these key issues, accentuated by the reduction in market activity levels typically seen in the third quarter, would make further improvements in prevailing market conditions unlikely,” UBS said in a statement.
UBS is one of several global banks being investigated in the U.S. and other countries for alleged rigging of benchmark interest rates known as Libor, or London Interbank Offered Rate.
Ermotti said no further evidence of manipulation by UBS has been found other than what the bank already reported to regulators last year, when it disclosed evidence against some of its own traders in exchange for leniency or immunity from U.S. and Swiss authorities.
“We’re waiting to see the results of the investigation. But there is no evidence at this stage that we have a particular position in that matter,” Ermotti told reporters.
In July, a former top Barclays executive admitting ordering staff to submit false interest rates during the credit crisis in 2008 because he believed the action was sanctioned by the Bank of England. Barclays has been fined $543 million by U.S. and British agencies for submitting false reports of its interbank borrowing rates.
Related posts:
Views: 0
Posted in 
Tags: 
