UBS Weighs Options To Snap Ties With Swiss Government

Published: 29-Sep-2009

Due to the recent rebound in credit markets, UBS is confident that it can buy the assets back on its balance sheet

UBS is planning to snap its ties with Switzerland government, as it wants to but its way out of the bad bank scheme under which it is required to pay for protection against massive losses on toxic assets – reported the Financial Times.

Reportedly, the Swiss banking major has locked horns with FINMA, Swiss Financial Market Supervisory Authority, over the issue. In an interview to the newspaper, Oswald Grubel, chief executive officer of UBS, said: "It is very expensive. We have to make an offer to buy back those assets."

However, FINMA has said it would be "out of the question" for the lossmaking bank to pursue such a transaction amid current market instability. The Swiss government last month sold its 9% stake in UBS but $23.5 billion of UBS assets still remain warehoused in the government's bad bank.

Due to the recent rebound in credit markets, UBS is confident that it can buy the assets back on its balance sheet, but believes that it may not be possible to give shape to its plan before the second half of next year. Mr. Grubel added that the bank's US wealth management business, Paine Webber, was a non-core business. "We've had a lot of enquiries from potential buyers. But it wouldn't make sense to sell at current valuations," reported the newspaper.

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