UBS seeks early licence from RBI

UBS, the battered Swiss banking giant, now reeling under mounting losses of $13.7 billion from the sub-prime mortgage crisis last year, said yesterday it will expand its operations in the Indian market by pressing for an early "licence" from the Reserve Bank of India.

"I don't think today's results on our performance last year are going to change our plans in India," Dominik Von Arx, the UBS spokesperson in Zurich told Business Standard.

"India is one of the very important markets for UBS and the current difficulties faced by the bank will not impact India," he said after the presentation of annual results.

The Swiss bank announced substantial losses during the fourth quarter as well as the full year of $13.7 billion due to the sub-prime losses.

It confirmed that its fourth quarter net loss was at $11.23 billion due to mortgage securities compared with a net profit of $3.10 billion (Swiss franc 3.41 billion) last year.

"UBS expects 2008 to be another difficult year," it said in a statement.

In the face of continued write-downs amounting to $18.4 billion, UBS accepted injection of fresh funds of 13 billion francs from a Singapore government fund and an unnamed West Asian investor.

Despite the worsening performance and spiralling losses, UBS expressed confidence that its overall fundamentals are strong and will continue to forge ahead with its expansion plans in India.

Recently UBS Global Asset Management abandoned its much-planned acquisition of Standard Chartered Bank's mutual fund management business in India at a cost of $220 million due to lack of approval from RBI.

"The sale and purchase of Standard Chartered Bank's mutual funds management business could not proceed because we did not receive an approval from the regulator (RBI)," a senior UBS Global Asset Management executive said.