Huge first quarter loss prompts rights issue at UBS
Swiss bank UBS is issuing shares in a bid to raise CHF15 billion (£7.57 billion) in new capital and reports further writedowns of $19 billion (£9.6 billion) on subprime losses.
The bank also said its chairman, Marcel Ospel, is stepping down at the group's AGM in April.
For the first quarter of 2008, UBS said it expects to report a net loss attributable to shareholders of approximately CHF12 billion (£6.05 billion) after writedowns of approximately $19 billion (£9.6 billion) on US real estate and related structured credit positions.
In order to limit the damage, UBS has created a new unit to hold its US real estate assets.
UBS chief executive Marcel Rohner said: "During the quarter, profits from most of the businesses remained acceptable in challenging conditions. We have made further prompt writedowns and sales of our impaired US real estate-related positions.
"However, the environment remains difficult, and while we are committed to further substantially reducing our exposures we do not want to undertake sales of positions at severely distressed levels."
The bank admitted conditions for positions related to US residential mortgages further deteriorated during the first quarter, particularly in March, as the bank was forced to sell or write down more assets.
UBS said the new leadership of the investment bank will focus on "resizing the business in accordance with the current market opportunities, including strategic reductions in all major cost categories".
During the credit crisis, Zurich-based UBS emerged as the worst-hit bank in Europe.