Singapore Does Not Want to Influence UBS
The Government of Singapore Investment Corporation (GIC), which is investing 11 billion Swiss francs ($9.97 billion) in UBS, was quoted as saying it does not want influence the running of the Swiss bank.
"GIC pursues, as a financial investor, exclusively commercial objectives. We have no plan to control the UBS business," GIC's Managing Director Lim Siong Guan told Swiss newspaper Neue Zuercher Zeitung in an interview.
Shareholders in UBS , Europe's biggest casualty of the U.S. subprime mortgage crisis with $14.5 billion of writedowns, will be asked at an extraordinary meeting on February 27 to approve a 13 billion Swiss franc ($11.79 billion) capital injection by Singapore and an unnamed Middle East investor.
The GIC head's comments appeared calculated to soothe ruffled Swiss pride after UBS, the world's largest wealth manager, turned to the Singaporean sovereign wealth fund in order to help shore up its battered balance sheet.
Meanwhile, Swiss newspaper SonntagsZeitung reported on Sunday that UBS may have more writedowns to make of $5 billion to $8 billion on its subprime exposures. The newspapeer cited analysts but gave no specific source for the report.
A spokesman for UBS declined to comment.
Investment analysts do not rule out that UBS, which reports its fourth quarter and full-year results on February 14, may have more charges on subprime-related exposures but many believe the Swiss bank has put the worst of the crisis behind it.
SonntagsZeitung said that UBS's exposures of risky mezzannine CDOs (collateralised debt obligation) positions were practically worthless.
The newspaper also said UBS was planning to make savings of half a billion francs in its information technology budget.
UBS Chairman Marcel Ospel is expected to be given a rough ride by shareholders for presiding over one of the biggest debacles in the history of the bank, which has been plunged into losses by the subprime meltdown.
The GIC is injecting 11 billion francs by subscribing to mandatory convertible notes paying a coupon of 9 percent.
GIC Is Profit-Oriented
Lim Siong Guan said the GIC was run according to strictly profit-oriented criteria and, even though some local Singaporean politicians sat on its board, the management was made up of investment professionals.
"All decisions are taken by this management team and the Board of Directors does not get mixed up in it," he told the newspaper. He also said he believed in UBS's long-term growth potential in the fast-growing financial services business.
UBS has a fast-growing presence in Asia.
"From our point of view the only relevant question is: can this capital injection strengthen the bank so that its business grows further? If so, that is clearly in the interest of all shareholders," he added.
Mounting anger among investors with UBS chairman Ospel has fuelled rumours that he may be ousted and replaced by Deutsche Bank head Joseph Ackermann.
But SonntagsZeitung reported that Ackermann had told his entourage that taking the helm at UBS was out of the question.
The newspaper also mentioned Swiss National Bank Vice President Philipp Hildebrand as a posible successor to Ospel.