UBS warned that its investment banking arm had made losses on various positions, "in particular credit valuation adjustments on monoline insurance exposures". Even with a Sfr3 billion ($2.9 billion) tax credit and positive results from the wealth management and asset management arms, the bank could still report an overall loss for the quarter, UBS said - assuming the wealth and asset management arms contribute the same amount as in the first quarter of the year, this would mean an investment banking loss of around Sfr 5 billion.
In the first quarter of 2008, UBS reported losses of Sfr11.5 billion, which included $19 billion of writedowns on its US real estate and structured credit holdings. At the end of the quarter on March 31, it still had $6.3 billion of monoline exposure, $17.1 billion exposure to US Alt-A residential mortgages, $6.3 billion to US commercial real estate and $15.6 billion to US subprime mortgages. The bank has been one of the worst-hit by the US subprime crisis, with total writedowns of more than $24 billion since the crisis began in mid-2007.
However, UBS said that after its successful Sfr16 billion rights issue in June this year it would not seek to raise more equity.
The week on Risk.net, July 7-13, 2018Receive this by email