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Tuesday, 4 August 2009

UBS posts loss, $16bn hot money looking for a new home

UBS posted its third straight quarterly loss after being hit by restructuring costs and an accounting charge related to its own debt.

The Zurich-based bank said its net loss widened to SFr1.4bn ($1.31bn) for the three months ended in June, up from SFr395m for the same period last year.

UBS’s results show that customers (OK, let's call them clients) withdrew more than SFr16bn from its wealth management unit in the second quarter.

Overall, the bank recorded a pre-tax loss of SFr1.8bn in its investment banking arm in the second quarter. UBS was hit by a SFr1.2bn charge related to the company’s own debt, although let us remember that this is just a reversal of phantom profits that they didn't really deserve to book as profits when the margin on their own debt widened, and no doubt it didn't stop anybody putting their hands up for a bonus.

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