UBS says loss from unauthorized trades is $2.3 billion
Baku, September 19 AZERTAC). UBS AG, Switzerland`s biggest bank, said its loss from unauthorized trading amounted to $2.3 billion, more than initially reported, while Chief Executive Officer Oswald Gruebel dismissed calls to step down.
The loss, first estimated on September 15 at $2 billion, came from trading in Standard & Poor`s 500, DAX and EuroStoxx index futures over the past three months. UBS made the latest disclosures two days after London police charged a 31-year-old trader Kweku Adoboli with fraud and false accounting.
While the bank said the trading losses occurred over the past three months, London police charged UBS trader Kweku Adoboli with false accounting offenses dating to October 2008, and fraud dating back to January 2009, according to the court charge sheet.
Adoboli didn`t enter a plea, and his law firm, Kingsley Napley didn`t comment after the hearing.
UBS has covered the risk from the trading and its equities business is operating normally again within risk limits, the bank said.
UBS notified the police and regulators of the unauthorized trades early in the morning of September 15. Adoboli was arrested at 3:30 a.m. and remains in police custody. He is being held until September 22, when he can request bail at a court hearing. The bank said on September 15 it may be unprofitable in the third quarter after the unauthorized trading at its securities unit. The loss, less than two months after Gruebel said the bank had “one of the best” risk-management units in the industry, exposed flaws in its controls.
The measures brought limited benefits. UBS`s share among the nine biggest investment banks of revenue from trading stocks and bonds and advising clients on capital-market transactions and mergers more than doubled from 2009 through the first half of this year, yet it remained the lowest.
UBS was aiming for annual savings of 2 billion francs by the end of 2013 through the latest job cuts. More reductions are likely following the trading loss, analysts and recruiters said.
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