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Swiss banks to announce massive losses: report

india Updated: Feb 08, 2009 23:05 IST

Two of Switzerland's largest banks, UBS and Credit Suisse, are set to announce combined losses for 2008 of 29 billion Swiss francs later this week, the Sonntag newspaper reported on Sunday.

According to the report, UBS will announce an annual loss of 21 billion Swiss francs (14 billion euros, 18 billion dollars) on Tuesday, the largest in Swiss history and reflecting the fact the company was one of the banks hardest hit by the US subprime loan crisis.

Last November, UBS posted a net profit of 296 million Swiss francs for the third quarter following a year of losses, but warned that a renewed loss was looming for the following quarter.

Under a rescue plan unveiled in October, the Swiss government injected six billion francs in new capital to UBS and lent 54 billion dollars to the bank to transfer its non-liquid assets into a separate fund.

The massive spread of so-called "toxic" assets -- mainly linked to financial instruments now worth very little because of the US home-loan crisis -- throughout the global banking system is at the core of the crisis.

Sonntag also reported that UBS would announce "5,000 to 8,000 new job cuts" adding to an earlier decision to cut 9,000 positions.

A company spokesman told AFP January 22 that further cuts would be made in bank's fixed income, currencies and commodities trading unit, without specifying the number to be made.

The German language daily also reported that Credit Suisse would announce a loss of eight billion Swiss francs for 2008, althought the bank is not expected make any further job cuts.