UBS admits to pounds 200m loss on derivatives and bonds
Saturday 31 January 1998
Last November, UBS admitted to losing pounds 90m on equity derivative trading during the first half of 1997. This was "due to changes in UK tax law and an error in a computer model to price options", the bank said.
But recent rumours of far larger derivative losses prompted the bank to admit yesterday that "difficult world-wide market conditions ... led to further losses of around 150 million Swiss francs (pounds 65m) in the ordinary equity derivatives business during the closing months of the year".
In addition, UBS said losses on proprietary trading in Japanese banks' convertible bonds had led to "a negative balance of around 100 million Swiss francs (pounds 40m) for equity proprietary trading". The bank, which was caught out by the sell-off in Japanese bank shares that followed the failure of Yamaichi Securities, failed to specify the magnitude of the losses made on the Japanese convertible bonds themselves.
Some sources believe the magnitude of UBS's trading losses may prove to be greater still, saying that certain UBS trading positions still remained open. It is unclear, though, whether further UBS trading losses would ever be disclosed, following the bank's decision, announced in December, to merge with rival SBC.
UBS also used yesterday's statement to try and dispel rumours that SBC was keen to renegotiate the terms of the merger.
UBS said: "Rumours of a purported renegotiation of the merger agreement between UBS and SBC are totally unfounded. UBS's disappointing overall result in equities trading was known to both banks at the time of the merger negotiations."
- 1 End of the licence fee: BBC to back radical overhaul of how it is funded
- 2 This restaurant has misunderstood the concept of 'cheese and biscuits'
- 3 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 PornHub turns masturbation into energy in bid to save the planet
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
End of the licence fee: BBC to back radical overhaul of how it is funded
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...