Swiss bank UBS (UBSN.VX: Quote, Profile, Research) issued a profit warning and cancelled plans for a cash dividend on Monday as the U.S. subprime mortgage meltdown forced it to make one of the largest writedowns by any bank since the subprime crisis broke.
UBS said it had obtained an emergency capital injection from the Singapore government and an unnamed Middle East investor.
Following is a summary of key points of UBS's announcement:
*UBS to take new $10 billion writedown on top of $3.7 billion hit made so far this year related to U.S. subprime mortgages, making it the biggest victim of the crisis to date among major European banks. U.S.-based Citigroup (C.N: Quote, Profile, Research) expects to write off between $8 billion and $11 billion for subprime debts.
*UBS says may record 2007 full-year loss.
* UBS says to add 19.4 billion Swiss francs ($17 billion) to its BIS Tier 1 capital.
*UBS issues 13 billion francs in capital, with 11 billion francs to be placed with the Government of Singapore Investment Corp (GIC).
*Another 2 billion francs are to be placed with a Middle East investor.
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