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HenryTo
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
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 Posted: Mon Sep 26, 2011 12:11 pm Post subject: |
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Morningstar on UBS CEO's resignation:
| Quote: | | On Saturday, UBS UBS announced that CEO Oswald Gruebel had resigned following the recent trading scandal. He will be replaced on an interim basis by Sergio Ermotti, head of UBS' Europe, Middle East, and Africa business. Gruebel's resignation is a loss for UBS' shareholders, in our opinion, as it comes at a time when leadership and continuity are especially needed, with turmoil sweeping across Europe and regulatory changes coming fast and furious. It also reinforces our opinion that UBS' chief rival, Credit Suisse CS, is a better business despite its capital levels. Ermotti is UBS' fourth CEO since 2007. We restate our opinion that the trading loss does not threaten UBS' capital base. By o ur calculations, the loss will reduce UBS' hefty 16.1% core Tier 1 capital ratio by less than 100 basis points and still put the firm well ahead of most other global banks. We think the trading loss is primarily indicative of the riskiness of investment banks' trading operations generally and, to a lesser extent, speaks to UBS' inadequate risk controls. |
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HenryTo
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
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| Posted: Fri Sep 16, 2011 10:46 pm Post subject: |
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Morningstar's latest comments on UBS:
| Quote: | UBS is struggling to regain its strength in investment banking.
UBS reported Thursday morning that a young trader had lost close to $2 billion in unauthorized trades. We'll take a closer look at this as more details emerge, but our initial impression is that the loss, while painful, will have only a marginal impact on the company's value. As of June 30, UBS had CHF 47 billion in equity and a hefty 16.1% core Tier 1 ratio, which means it will be able to absorb the loss without resorting to a capital raise or other painful measures, in our opinion.
However, we're quite concerned about the impact this will have on UBS' reputation, and therefore its future business prospects. UBS lost nearly CHF 30 billion during the financial crisis and had to be bailed out as a result of its ill-considered investments in low-quality assets, especially U.S. subprime mortgages. UBS' private bank is its crown jewel, and its main challenge in recent years has been to regain its clients' trust and it has had only moderate success--net new asset inflows, while now positive, are weak relative to competitors. We think this announcement will undermine customers' fragile confidence in the institution. Moreover, we think this could bring about increased regulatory scrutiny and perhaps additional pressure on UBS' already thin profitability. |
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rffrydr
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Location: Sunny California
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pinocchio
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Location: Switzerland
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HenryTo
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Posts: 11743
Location: Los Angeles, California
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rffrydr
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rffrydr
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| Posted: Mon Mar 31, 2008 7:42 pm Post subject: |
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...and they closed up in New York trading. Interesting.
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rffrydr
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| Posted: Mon Mar 31, 2008 7:44 am Post subject: |
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I didn't expect this would be "good news":
http://www.iht.com/articles/2008/03/31/business/ubs.php
Although Merrill says 21billion writedown will be glad tidings. Better if they could hang on for a year and convenants of their SWF issuance fade.
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