Chronology of turbulence at Swiss bank

February 10, 2009
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, GENEVA, February 10 – Plagued Swiss banking giant UBS announced a loss of nearly 20 billion Swiss francs for 2008, the biggest in Switzerland\’s corporate history.

Here is a chronology of the events that left Switzerland\’s financial flagship teetering, starting with the bank\’s attempt to boost investment banking.

JUNE 2005: UBS launches Dillon Read Capital Management (DRCM), a new alternative investment business or hedge fund. The head of the Investment Banking unit is changed.

MARCH 2006: Investment Banking proposes boost to underperforming fixed income products after a review. "The consultant\’s review did not consider the risk capacity associated with the recommended product expansion," UBS will say two years later in a report to shareholders.

FEBRUARY 13, 2007: UBS reports 2006 net profit of 11.5 billion Swiss francs (7.1 billion euros, 9.2 billion dollars).

MAY 3, 2007: US-based DRCM closed after net losses of 150 million dollars in the first quarter of 2007.

JULY 6, 2007: UBS chief executive Peter Wuffli replaced by Marcel Rohner.

AUGUST 14, 2007: After a 8.9 billion franc first half net profit, bank signals probable "very weak trading result in the investment bank."

OCTOBER 1, 2007: Profit warning for third quarter and 4.4 billion dollars in writedowns on fixed income due to US subprime-related losses. Some 1,500 jobs cut in Investment Banking, the first in a series over more than a year.

OCTOBER 30, 2008: UBS confirms third quarter 830 million franc loss. Warning of fixed income exposure to deteriorating US mortgage markets,

DECEMBER 10, 2007: Additional writedowns of 10 billion dollars announced. Warning of a record full year loss. UBS plans to strengthen capital with 13 billion francs from Singapore and an unnamed Middle Eastern investor.

JANUARY 30, 2008: Another 4.0 billion dollar writedown on the US residential mortgage market.

FEBRUARY 14, 2008: Historic annual loss of 5.2 billion Swiss francs for 2007. Total writedowns on US residential mortgage market: 18.7 billion dollars.

FEBRUARY 27, 2008: Chairman Marcel Ospel comes under fire at an emergency shareholders meeting. But shareholders back the capital hike.

APRIL 1, 2008: Additional writedowns of 19 billion dollars on US real estate and structured credit. Warning of a huge first quarter net loss. Ospel to bow out at AGM on April 23.

APRIL 18, 2008: UBS report to shareholders reveals DRCM accounted for just 16 percent of subprime losses. The bulk were the Investment Banking unit.

APRIL 23, 2008: Chief legal counsel Peter Kurer appointed chairman at AGM.

MAY 6, 2008: First quarter net loss of 11.5 billion francs.

AUGUST 8, 2008: UBS buys back about 19 billion dollars of securities in settlement for a Massachusetts securities fraud case. New York state also filed civil fraud charges against the bank in July.

AUGUST 12, 2008: UBS reports bigger-than-expected 358 million francs second-quarter loss despite a four-billion-franc cut in its tax bill. Writes down another five billion dollars on its US business. Worried clients desert bank, asset outflow reaches 43.9 billion francs.

OCTOBER 2, 2008. Shareholders approve restructuring plan. Splits Investment Banking, Global Asset Management und Wealth Management into three autonomous units. New board members.

OCTOBER 16, 2008: Unprecedented 61-billion-dollar Swiss government and central bank aid package including takeover of toxic assets in a ring-fenced "Stabfund."

NOVEMBER 4, 2008: A 296-million-franc third-quarter net profit reported, but a warning for the fourth. Net outflows reached 83.6 billion francs for the third quarter alone.

NOVEMBER 27, 2008: UBS shareholders approve rescue package and another capital hike of 6.0 billion francs.

DECEMBER 8 to 15, 2008: Government rescue plan has a choppy ride through Swiss parliament but approved, and money starts to flow to Stabfund.

JANUARY 15, 2009: Luxembourg authorities order UBS to compensate a French brokerage for 30 million euros invested in Madoff funds.

FEBRUARY 10, 2009: UBS records biggest full-year loss in Swiss corporate history: 19.7 billion francs for 2008. Another 2,000 jobs cut in Investment Banking, total of 11,000 since October 2007.

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