Swiss govt injects $5.2 bn to rescue UBS

Swiss govt injects $5.2 bn to rescue UBS
AFP
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First Published: Thu, Oct 16 2008. 01 34 PM IST
Updated: Thu, Oct 16 2008. 01 34 PM IST
Zurich: The Swiss government on Thursday injected 6 billion francs into banking giant UBS, while the central bank loaned it $54 billion to transfer its non-liquid assets into a separate fund.
The fresh capital, equivalent to $5.2 billion, would give the Swiss government a 9.3% stake in the bank, one of the worst-hit by the global financial crisis.
UBS said in a statement it had also reached an agreement with the Swiss central bank to transfer up to $60 billion of non-liquid assets into a separate fund.
Under the agreement, the Swiss National Bank would lend UBS $54 billion for this separate fund, with the remaining$6 billion to come from UBS itself.
When the loan is fully repaid, UBS can buy the fund back from the central bank.
“This transaction gives comfort in UBS’s future. The extremely difficult market environment led us to accelerate our risk reduction with a definitive move,” group CEO Marcel Rohner said.
UBS had been forced to write down over $42.5 billion dollars worth of assets as well as report consecutive quarters of losses due to the subprime crisis.
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First Published: Thu, Oct 16 2008. 01 34 PM IST
More Topics: Market Crisis | Swiss Government | Banks | UBS | Rescue |