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Beleaguered bank posts country's biggest loss

UBS AG, Switzerland's biggest bank, posted a 20.9-billion-Swiss-franc (US$18 billion) loss for 2008, more than initially reported, and said it remained "extremely cautious" about the outlook for this year.

The 2008 loss is the biggest in Switzerland's history.

The full-year net loss widened by 1.19 billion francs from the figure reported on February 10 because of costs to settle a United States tax investigation and additional writedowns on securities, the Zurich-based bank said in its annual report yesterday. UBS fell as much as 3.9 percent in Swiss trading.

Last month, UBS agreed to pay US$780 million and disclose the names of about 300 secret account holders to avoid US criminal prosecution on a charge that it helped wealthy Americans evade taxes. The bank also marked down securities that haven't yet been transferred to the Swiss National Bank's fund as part of a government aid package following record losses. "Our near-term outlook remains extremely cautious," Chairman Peter Kurer and Chief Executive Officer Oswald Gruebel told shareholders in a letter.

UBS hired Gruebel, the former head of rival Credit Suisse Group AG, last month to replace Marcel Rohner as CEO to restore investor confidence. Last week, the bank nominated Kaspar Villiger, a former Swiss finance minister, as a new chairman of its board of directors, replacing Kurer.

UBS shares, 9.61 francs at 9:37am in Zurich yesterday, are down 35 percent so far this year, compared to a 33-percent decline in the 65-company Bloomberg Europe Banks and Financial Services Index.

UBS amassed more than US$50 billion in writedowns and losses since the beginning of the financial crisis, forcing it to raise more than US$32 billion in capital from investors, including the government, and cut 11,000 jobs.

UBS plans to further cut risks, reduce assets on the balance sheet and lower costs this year to return the bank "as soon as possible to a sustainable level of overall profitability," Kurer and Gruebel said.

UBS is fighting a lawsuit that seeks to force the disclosure of as many as 52,000 American customers who allegedly hid their Swiss accounts from tax authorities.

The bank said new money at its wealth management Americas unit "remains positive."

Those gains have been partially offset by withdrawals at the wealth management and Swiss bank division. The asset management unit is also experiencing further client redemptions, UBS said.


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