Wednesday, January 30, 2008

UBS Reports Record Loss After $14 Billion Writedown

By Elena Logutenkova and Elizabeth Hester

Jan. 30 (Bloomberg) -- UBS AG posted the biggest loss ever by a bank after raising fourth-quarter writedowns on securities infected by U.S. subprime mortgages to $14 billion.

Europe's largest bank by assets said today it had a net loss of 12.5 billion Swiss francs ($11.4 billion) for the quarter, almost double the median estimate of analysts surveyed by Bloomberg. The annual shortfall was about 4.4 billion francs, the first since Zurich-based UBS was created through a merger a decade ago.

UBS fell 1.6 percent in Swiss trading as its loss exceeded those reported earlier this month by Citigroup Inc. and Merrill Lynch & Co. The collapse of the U.S. subprime mortgage market has led to more than $130 billion of losses and markdowns at securities firms and banks since June.

``One has to question the management's ability to recognize the problems that have existed and continue to exist,'' said Michael Holland, chairman of New York-based Holland & Co., where he oversees more than $4 billion. ``When you're talking about an $11 billion issue and it's Jan. 30, this raises questions about who is watching and what did they know.''


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