UBS lost $356 million by investing in Facebook shares

Swiss bank UBS lost 349 million Swiss francs ($356 million) by investing in Facebook shares, more than halving its profits.

UBS’s second quarter profits were $425 million Swiss francs ($434 million), compared with 1bn francs a year earlier.

Facebook was valued at $104 billion at its flotation in May, but the shares are now 39% below the initial sale price.

As a result, UBS’s investment bank reported a loss in the quarter, compared with a profit of 730 million Swiss francs a year earlier.

 

Swiss bank UBS lost 349 million Swiss francs ($356 million) by investing in Facebook shares, more than halving its profits

 

UBS warned that failure to resolve problems within Europe’s banking system “accentuated by the reduction in market activity levels typically seen in the third quarter” meant its next set of earnings were likely to be flat.

As a result, UBS said it would look at making further cost savings. The Swiss group is already in the process of cutting 3,500 jobs.

The company also said it was on target to meet new Basel III bank rules and would not have to issue new shares to generate additional money.

Its ratio of high quality – tier 1 – capital to lending was 8.8%, just shy of the 9% that will be required from next year.

Deutsche Bank has reported a 63% fall in second quarter earnings to 375 million Euros ($460 million) from 969 million Euros last year.

Like UBS, Deutsche blamed the economic downturn in Europe and the US for lower fees and commissions as firms cut back on big deals and share sales.

In a joint statement, Deutsche’s co-chairmen Jürgen Fitschen and Anshu Jain said: “The European sovereign debt crisis continues to weigh on investor confidence and client activity across the bank.”

 

Diane A. Wade

Diane is a perfectionist. She enjoys searching the internet for the hottest events from around the world and writing an article about it. The details matter to her, so she makes sure the information is easy to read and understand. She likes traveling and history, especially ancient history. Being a very sociable person she has a blast having barbeque with family and friends.

Recent Posts

Donald Trump and Elon Musk Celebrate Election Victory at UFC 309

Image source: Wikimedia Commons President-elect Donald Trump celebrated his election victory at the Ultimate Fighting…

1 week ago

White House 2024: Donald Trump Wins, Kamala Harris Calls Him to Concede Election

Millions of voters across the US chose to return Donald Trump to the White House…

3 weeks ago

Who Won? Donald Trump Declares Victory as He Addresses Jubilant Supporters in Florida

Donald Trump declares victory in the US election as he addresses jubilant supporters in Florida.…

3 weeks ago

Stocks Soaring as Donald Trump Closes in on US Victory

Stocks around the world are rising as Donald Trump appears to be on the cusp…

3 weeks ago

Who Won? Kamala Harris Cancels Election Night Party as Path to Victory Narrows

Donald Trump has won Pennsylvania, North Carolina and Georgia and taken a lead over Kamala…

3 weeks ago

Quincy Jones Dead at 91

Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…

3 weeks ago