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UBS, Bleeding Red, to Raise $3.5 Billion

Stocks in this article: UBS

Swiss banking giant UBS (UBS) will report a second-quarter loss from previously announced restructuring charges and expects to raise 3.8 billion Swiss francs ($3.49 billion) in a sale of stock.

The loss for the second quarter, which the company said it based on results from April and May and estimated results from June, will be narrower than a first-quarter loss of 2 billion Swiss francs.

"The operating result for the quarter is expected to represent an improvement compared with the first quarter of 2009, largely attributable to better market conditions affecting the investment bank and a reduction in losses and writedowns on legacy risk positions," the bank said in a statement.

But UBS, which has run into trouble because of subprime mortgages in the U.S., said so far in its latest quarter net new money has been "negative" in its three wealth and asset management divisions.

The bank expects its Tier 1 capital ratio to be higher on June 30 than on March 31 because of a reduction in risk-weighted assets. The Tier 1 capital ratio isn't affected by its own credit charges.

UBS said it plans to offer 293.3 million shares to a small number of institutional investors at 13 francs a share.

The bank is partly owned by the Swiss government. It received 6 billion francs from the Swiss government in a rescue package last October.

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