Switzerland's UBS To Take Loss
Sep. 24, 1998
ZURICH, Switzerland (AP) _ Turmoil on world markets will force United Bank of Switzerland to take an after-tax charge of between 500 million Swiss francs ($360 million) and 1 billion francs ($720 million) in the third quarter of 1998.
The loss will leave the bank only a modest net profit for the second half. The company blamed turmoil in emerging markets for a shortage of liquidity, which in turn harmed UBS's fixed-income business in those markets.
UBS also cited wide volatility in stock indexes in the United States and Europe, which hurt the value of UBS' stock holdings. Since turmoil in the markets intensified in late August, UBS ``has suffered substantial declines in earnings,'' the bank said in statement released Thursday.
UBS' businesses in the emerging markets of Russia, Southeast Asia and Latin America produced a drop in income of 630 million francs ($453 million).
However, the bank said it didn't expect these developments to recur and is hoping the world economy would escape prolonged, serious weakening. If those factors play out as hoped, the bank said it would suffer ``no major deterioration in the group's structural power.''