UBS has announced it will write off a further $19bn in bad debt as the Swiss banking giant struggles to restore its capital base.
Chairman Marcel Ospel has decided to step down, with sub-prime losses for UBS now totalling roughly $37bn.
It comes as another European giant Deutsche Bank reports it will make an additional €2.5bn (£2bn) sub-prime related write-down.
In its estimated Q1 results, UBS expects to record a SwF12bn (£6bn) loss and will undertake a SwF15bn (£7.5bn) fully underwritten rights issue to strengthen its deteriorating position.
It has also announced it will form a new unit to hold its illiquid US real estate assets.
“We believe this capital increase and the creation of a vehicle to separate problem assets from the remainder of our businesses will allow us to return to sustainable value creation over time,” UBS CEO Marcel Rohner says.
“We have reduced risk weighted assets and implemented measures to control costs and strengthen the structure of the firm.
“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.
“With these measures we have created the basis to weather one of the most difficult periods in the history of the industry."
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