UBS Shares Drop on Reports of Looming Loss

Associated Press

Shares in UBS fell 6.2 percent Monday on newspaper reports the bank will announce record full-year losses next month and as investors cashed in on the stock's recent rise.

Shares in Switzerland's largest bank stood at just under 16 Swiss francs ($14.28) on the Zurich exchange shortly before noon.

Analysts at Zuercher Kantonalbank and private bank Vontobel said press reports over the weekend were the main reason for the drop, as well as investors booking profits after the share's 14 percent rise the previous week.

Swiss newspaper SonntagsZeitung reported Sunday that the bank expects to make a loss of 8 billion francs ($7.14 billion) in the fourth quarter. Together with previous quarterly losses this would result in a full-year loss of 20 billion francs for 2008—a record for a Swiss company—the newspaper said.

SonntagsZeitung did not give a source for its information and UBS spokeswoman Sabine Jaenecke declined to comment on the report or the expected quarterly results, which are to be announced Feb. 10.

UBS was among the European banks hardest-hit by the U.S. subprime mortgage crisis, and last October took advantage of a $60 billion bailout offer from the Swiss government allowing it to dispose of poorly performing assets.

The Zurich-based bank is also seeking ways of ending a U.S. Justice Department investigation into allegations it helped American customers evade taxes between 2002 and 2007.