Swiss Banking News: December 2008

20.12.2008 Standard & Poors included UBS AG on the list of financial firms whose ratings or outlooks were reduced because of funding volatility and “significantly pressured” earnings potential. UBS's losses and writedowns since the beginning of the credit crisis made $48.6 billion, and S&P spoke about “larger risk concentrations and weaker risk management than it was previously perceived”. In October 2008, UBS had to accept government aid in the amount of $59.2 billion to help it split off risky assets and receive extra cash. The long-term rating of UBS's major Swiss competitor, Credit Suisse Group AG, was reduced from A+ to A. Earlier this month Credit Suisse reported a $2.7 billion net loss for October and November.

31.12.2008 UBS AG announced the sale of its 3.4 billion share stake in Bank of China in a deal estimated to be worth around US$900 million. The estimation is based on Bank of China's stock price on the Hong Kong exchange, as the Swiss bank did not reveal the information how much it gained from the sale. The 3.4 billion “limited H-shares” in Bank of China were bought by UBS in 2005 for $500 million – the amount equivalent to a stake of about 1.6 per cent. Despite the sale of the share stake, UBS is planning to continue its business relationship with Bank of China.