UBS Leads Banks Lower Amid Credit Market Fears
Swiss bank UBS poured cold water on speculation it planned to sell major business units to raise cash but failed to stem a loss of confidence as investors drove its shares down 13 percent on fears of financial contagion.
Europe's hardest-hit bank so far by the sub-prime crisis, saw its shares spiral to levels not seen for a decade as investors took flight from the financial sector following the emergency weekend sale of U.S. bank Bear Stearns .
UBS said it was maintaining its strategy focusing on wealth management and investment banking after speculation intensified the group may be looking to sell its U.S. private banking division, once called Paine Webber, or parts of its investment banking franchise.
"UBS' strategy and business model are not about to change. None of our major operating businesses are up for sale," said UBS spokesman Christoph Meier.
UBS shares have fallen around 70 percent since June as fears mount the group would have to write down more than the $18 billion in subprime assets written down so far. The bank remains heavily exposed to the U.S. mortgage market with estimates that it still has around $80 billion worth of risky investments.
UBS was down 13 percent at 24.76 Swiss francs in heavy volumes, falling back to levels briefly seen in 1998 putting it on track for its largest one-day fall since Sept. 30, 1998, when it fell by more than 14 pct.
The DJ Stoxx European banking sector index was down 6 percent at the same time.