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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (23290)	9/30/2007 9:46:44 PM
From: elmatador	Respond to of 219932

UBS latest victim of credit turmoil. Will announce departure of its investment bank head as it warns that it has written off billions of dollars on fixed-income assets, making the Swiss banking group the biggest casualty so far of the turmoil in the global financial markets. UBS latest victim of credit turmoil By Peter Thal Larsen in London and David Wighton in New York Published: September 30 2007 23:59 \| Last updated: September 30 2007 23:59 UBS is on Monday expected to announce the departure of its investment bank head as it warns that it has written off billions of dollars on fixed-income assets, making the Swiss banking group the biggest casualty so far of the turmoil in the global financial markets. According to people familiar with the matter, the bank is expected to say it has written down its fixed-income portfolio by more than SFr3bn ($2.6bn), triggering a third-quarter loss of at least SFr600m ($516m). The losses, which far exceed those reported so far by other investment banks, are expected to trigger the departure of Huw Jenkins, who runs UBS’s investment banking business. He will be the second top banking executive to fall victim of the market turmoil. Last month Warren Spector was ousted as co-president of Bear Stearns following the collapse of two mortgage hedge funds the bank managed. The warning comes after a turbulent period for the bank, which earlier this year ousted its chief executive, Peter Wuffli, amid dissatisfaction over his handling of the bank’s in-house hedge fund, Dillon Read Capital Management. News of UBS’s loss will prompt fears among investors that other investment banks have suffered similar setbacks in the past few months. In recent weeks, Lehman Brothers and Goldman Sachs reported better-than-expected results and Bear Stearns, the bank seen as most exposed to the US mortgage market, still recorded a profit. But in recent days, analysts have become more concerned about the prospects for some of the banks whose quarter ends in September. Deutsche Bank shares were hit last week amid concerns that it will take big writedowns. Analysts have also dramatically reduced their forecasts for Merrill Lynch with William Tanona at Goldman Sachs predicting it will have barely broken even because of multi-billion-dollar mark-to-market losses on leveraged loans and collateralised debt obligations. News of UBS’s losses was first reported by the Wall Street Journal. The turbulence in the capital markets has caused liquidity to dry up for a range of bonds and derivatives, particularly those backed by mortgages. This has triggered a widespread debate about how banks should value those securities if there is no market price for them. Among other banks still to report, Citigroup is known to have taken big losses in credit trading. The Financial Times reported that Citigroup lost more than $700m trading credit securities in July alone. UBS’s new chief, Marcel Rohner, has promised investors he will restore discipline to its operations. At the time of UBS’s quarterly results last month, Mr Rohner warned that if turbulent conditions prevailed the business would “probably see a very weak trading result”. UBS was one of the first large financial institutions to fall victim to the meltdown in the US subprime mortgage market when it announced the closure of DRCM in May. Copyright The Financial Times Limited 2007