UBS seeks fresh money, warns of Q2 loss

Troubled bank UBS hopes to raise SFr3.8 billion ($3.46 billion) through a new share issue, it announced overnight on Thursday.

This content was published on June 26, 2009 - 10:25

It follows a warning of a likely net loss in the second quarter and more net outflows in its wealth and asset management divisions.

The troubled Swiss bank said it was offering nearly three million new shares to a small number of institutional investors at SFr13 each. This is slightly lower than Thursday's closing price of SFr13.97.

A statement from the bank said the aim was to strengthen confidence in both the bank and in Switzerland as a financial centre.

Earlier, the bank said that on the basis of provisional figures for April and May and forecasts for June, it was expecting to post a net loss for the second quarter of 2009. However, the operating result for the quarter is forecast to be better than for the first three months of the year.

Last autumn UBS received a rescue package of SFr6 billion from the Swiss government after running into problems arising from the US sub-prime mortgage crisis, which forced it to write down billions of francs. The bank was also allowed to offload toxic assets into a special fund.

The UBS share issue has been welcomed by the finance ministry, the Swiss National Bank and by the financial regulatory body, Finma.

However, UBS shares fell after the announcement. Shortly after opening they were trading at SFr13.61 on the Zurich stock exchange. and agencies

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