THE Swiss government is in discussions with several parties over the sale of the stake it took in UBS, when it bailed the bank out last year.
Switzerland’s finance ministry, Finmin, said it had not yet decided whether to convert its mandatory convertible notes into shares or to sell them.
Finmin took the notes as part of a Sfr6bn (£3.4bn) injection it made into UBS, taking a 9.3 per cent stake in the stricken bank, which had racked up nearly $50bn (£31bn) in losses and writedowns.
The lockup period for conversion of the notes ended yesterday, allowing Finmin to convert its notes into equity.
The Swiss government has repeatedly said it will seek to exit its holding in the bank quickly, but Finmin said it had still not taken a decision on what to do with its investment.
UBS is highly unlikely to launch an attempt to repay the funds, because its capital Tier 1 ratio is down at 11 per cent, meaning it has relatively little capital to play with.
UBS, the world’s largest wealth management institution in terms of assets, was forced to accept government backing after massive investments into risky US assets forced it to make billions in writedowns.
Its dismal performance amid the credit crunch led to it posting the biggest annual loss in Swiss corporate history for 2008, of Sfr19.7bn.
FAST FACTS UBS
• Alongside a Sfr6bn capital injection from the Swiss government, UBS transferred $60bn in distressed assets to a central bank fund.
• Chief executive Marcel Rohner was replaced by Oswald Grübel earlier this year.