Posted on 02/08/2009 1:57:44 PM PST by NormsRevenge
ZURICH (AFP) – Two of Switzerland's largest banks, UBS and Credit Suisse, are set to announce combined losses for 2008 of 29 billion Swiss francs later this week, the Sonntag newspaper reported Sunday.
According to the report, UBS will announce an annual loss of 21 billion Swiss francs (14 billion euros, 18 billion dollars) on Tuesday, the largest in Swiss history and reflecting the fact the company was one of the banks hardest hit by the US subprime loan crisis.
Last November, UBS posted a net profit of 296 million Swiss francs for the third quarter following a year of losses, but warned that a renewed loss was looming for the following quarter.
Under a rescue plan unveiled in October, the Swiss government injected six billion francs in new capital to UBS and lent 54 billion dollars to the bank to transfer its non-liquid assets into a separate fund.
The massive spread of so-called "toxic" assets -- mainly linked to financial instruments now worth very little because of the US home-loan crisis -- throughout the global banking system is at the core of the crisis.
Sonntag also reported that UBS would announce "5,000 to 8,000 new job cuts" adding to an earlier decision to cut 9,000 positions.
(Excerpt) Read more at news.yahoo.com ...
Bad news for the DemocRATS and their donors.
I highly recommend that people pay attention to this, for one reason:
The Swiss have been very good at admitting to their losses and crap paper sooner than US banks have been, in both better estimates of how much of their portfolio is crap paper, and admitting it sooner, rather than trying to hide it.
The article is correct that UBS has already admitted to big losses early in this melt-down. This cost the top management of the bank their jobs (the Swiss banks are also intolerant of losses, and they don’t reward bankers who lose money - they FIRE them).
The fact that UBS is announcing another huge loss on their debt portfolio is a grim indication of what is to come for US banks. It took about another six months after UBS first announced their first round of crap paper before US banks started admitting “Uh, yea, we’ve got some issues...” So if the lead time holds true this time, in about three to five months, the US banks will be admitting a huge melt-down on their balance sheets too. Maybe sooner, since they have less room to lie about the crap any more, and there are so many more analysts and regulators looking over the situation than there were in the first round...
Weren’t a lot of their loses due to Hungarian mortgages payable in Swiss Francs?
The US is not responsible for that!
“...and there are so many more analysts and regulators looking over the situation than there were in the first round”
Sorry for being cynical, but once we eliminate mark to market, the banks will be back to cooking the books...until they are COMPLETELY depleted of assets.
Sure glad we have laws like Sarbanes-Oxley on the books, or else things would have really gone down the toilet!
I don’t know enough about SOx, but our laws have been way too weak regarding banks. Just a few months ago they were all “profitable”, or at least they reported out that way. Now, ALL OF A SUDDEN, they are broke.
What gives...sounds like Enron on a huge scale.
Looks like the Swiss banks are about to go down.
I don’t know if I would say the Swiss have been good about admitting their losses. They are just doing it now. All this started back in October of last year.
As long as new revelations keep coming, confidence will stay shot. Banks won’t lend because people who are about to lose their job won’t be looking for a mortgage or car loan.
No, the first round of losses they fess’ed up to was well before October of last year — it was in early 2008 and late 2007.
UBS also slashed their dividend for 2007 as a result of losses in 2007.
As I said, they’re way ahead of banks in the US on this. While our banks are busying trying to use taxpayer monies to prop up the dividends on their commons, UBS was slashing dividends on their common and firing executives responsible for the losses.
This is their third wave of losses they’re announcing...
No... no one trusts them now. No one. Not analysts, not each other.
All that will happen if MTM is delayed is that the pain stops now. Trust won’t be restored for years and years...
Sorry... I don’t agree. Their problems are a lot worse than ours, and they are just now beginning to lay out the facts. I would not say that it’s just the Swiss. The European banks are in deeper doo-doo across the board. It’s no wonder they are trashing the US as the cause of all this. They foolishly bought a lot more of the problem US loans than our banks did. Their mistake, more than ours.
For the the problem of their banks leverage vs. their GDP, I agree with you.
The flip side is that they’re DOING something about the problems other than talking and posturing, which is all the EU and US are doing, respectively.
Show me a bank in the US that when faced with problems like UBS sacked exec’s, directors, etc? None of them. Show me a government that, when faced with their problems (ie, huge bank losses) put in place a plan of increased reserve requirements? No country in the EU, nor the US, as decided to increase reserve requirements. In the US, we’re created an incentive for big reserves by the Fed paying interest on them... but that’s not an explicit directive to raise more capital.
You’re right that they have big problems. My point is, they’re much further along the road to actually solving them than we are. We (in the US) are just posturing and propping up. We’re no dealing the problems or the cause of the problems in any direct, long-term way. Heck, we haven’t even fired any bank execs for simple malfeasance yet. We’ve seen execs let go by acquiring banks, with cushy pay packages, but outright sacking? Nope.
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