Swiss Bank UBS (UBS) bombed again, posting a $329 million Q2 loss after taking a $5.1 billion write-down on mortgage-backed assets. To appease riotous investors, UBS will now separate its wealth management arm from its investment bank. This won’t help, of course, but it will allow Chairman Peter Kurer to say things like “more flexibility and agility.” WSJ:
Bowing to shareholder pressure, the Zurich-based bank said its main units will be separated, backing away from its integrated model, but said it has no specific plans to sell its investment bank, the source of major losses.
UBS was also able to dump some of the garbage on its balance sheet and nominate four new members for its board, which shareholders had accused of being insular and ineffective:
UBS, which markedly reduced its holdings in risky assets during the quarter, also proposed four new members to its board, which has been accused by some shareholders of being insular and of being weak on executives with banking experience.
The four are Rainer-Marc Frey, a Swiss hedge fund manager; Swiss Life Holding AG Chairman Bruno Gehrig; BP PLC executive Sally Bott; and William Parrett, a former executive with Deloitte Touche Tohmatsu.
…UBS, which sold $15 billion in mortgage assets to U.S.-based Blackrock Inc. in May, continued to whittle away at troublesome holdings during the quarter. Subprime securities fell to $6.7 billion from $15.6 billion in March; U.S. Alt-A securities fell to $6.4 billion from $17.1 billion; U.S. prime securities to $6.1 billion from $9.4 billion; and exposure to monoline insurers to $4 billion from $6.3 billion.
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