Top Firm Said To Be Giving Out 150% Pay Rises

The Daily Telegraph reports that Barclays Capital is set to announce that it is increasing its salary bands, and that some bankers could see their base pay increase by 150% - from £120,000 ($200,000) to £300,000 ($500,000).

According to the newspaper, the pay awards will also be backdated to June. The alleged move comes at a time when many firms are reviewing their compensation policies in the light of the global clampdown on banker bonuses, which are regarded as a major cause of the recent financial crisis. Several financial institutions are now re-balancing pay and placing a greater emphasis on base salaries in reward packages.

In the meantime, The Times reports that the board over at Royal Bank of Scotland are thought to be preparing to resign in the event that the UK Treasury vetoes its plan to pay some $2.5bn in bonuses this year-end. The newspaper quotes Ronnie Fox, from Fox Lawyers, who said: If you are put in a position where you can no longer do the job you are paid to do, then I cannot see how you can remain in place as a director'.

UBS boss sets out turnaround plan

The chief executive of Swiss bank UBS says he wants the firm to make profits of $15bn in three to five years' time.

Oswald Gruebel is in charge of turning the bank around after record losses from the sub-prime crisis and a tax row with the US. He said the plan was a 'revolution', adding 'if it was easy I would not be here'. Mr Gruebel was persuaded out of early retirement to join the bank. It was his first strategic presentation since he took over in February. He has already cut 7,500 jobs and sold the firm's Brazilian unit Pactual.

UBS was one of the banks hardest hit by the sub-prime crisis and was forced to write off $50bn in sub-prime related losses. That led to a record loss of $20.7bn last year.
Mr Gruebel said: 'There will be three guiding principles: reputation, integration, execution... we want to ensure that what has happened to UBS should not happen again.'
A dispute with the US government over taxes for wealthy American customers damaged UBS's reputation and it lost clients as a result. The new UBS will be 'one that performs to the highest standard and behaves with integrity and honesty,' Mr Gruebel said.

Analysts at Zuercher Kantonalbank welcomed the news. 'UBS has announced very ambitious goals that are significantly beyond our current estimates,' they said.
Tax deal

Separately, the Swiss Justice Department gave more details of its agreement with the US government to hand over information on 4,450 UBS customers. The names of Americans with more than 1 million Swiss francs ($980,000) in undeclared bank accounts at UBS between 2001 and 2008 will be handed over to US tax authorities. If there is evidence of 'fraudulent behaviour' the threshold is lowered to 250,000 Swiss francs. Anyone who earned an average of 100,000 Swiss francs a year for more than three years could also be on the list.

The corresponding amount in US dollars varies widely because the currency lost more than a third of its value against the Swiss franc during the period covered."

Britain breaks up RBS, Lloyds in big bang for banking

LONDON (AFP) - – Britain is to force state-rescued banks RBS and Lloyds Banking Group to sell assets in a massive shake-up of the banking sector but will support them with 30 billion pounds, the government said on Tuesday.
The government expects new banks to be born as a result of the break-ups which are the result of pressure from EU competition authorities.
The parts being separated from the parent groups add up to about 10 percent of Britain's troubled retail banking market.
In return for more state aid, Lloyds and Royal Bank of Scotland (RBS) will have to cut bonuses paid to top staff and increase lending to recession-struck businesses and individuals.

UBS piles up losses, clients withdraw assets

ZURICH (AFP) - – Swiss banking giant UBS on Tuesday plunged into further losses during the third quarter as clients spooked by tax scrutiny withdrew billions of dollars of funds and assets from the bank.
The bank said in a statement that its net loss for the three months ending September 30 reached 564 million francs (373 million euros, 552 million dollars), largely hit by credit charges.
The flagship of Switzerland's banking industry also failed to stem an outflow of funds.
Customers withdrew assets amounting to 36.7 billion francs over the quarter, bringing the total outflows over the first nine months of the year to 91.1 billion francs.
The outflows were particularly marked in the United States, where the bank agreed in August to disclose details of 4,450 accounts in order to stave off potentially damaging tax fraud charges brought by US authorities.

Warren Buffett's Berkshire to buy railroad

WASHINGTON (AFP) - – Warren Buffett unveiled Tuesday a deal to take over Burlington Northern Santa Fe, one of the largest rail operators in North America, calling it a huge bet on the future of the US economy.
The billionaire investor's Berkshire Hathaway holding group said it would purchase the 77.4 percent of Burlington Northern Santa Fe (BNSF) that it does not currently own for 100 dollars per share in cash and stock.
The offer values the rail operator at 44 billion dollars, including 10 billion dollars in debt. Buffett will invest some 26.3 billion dollars for the new stake.
'It's an all-in wager on the economic future of the United States. I love these bets,' said Buffett, known in financial circles as the 'Oracle of Omaha,' for his investing acumen.
The takeover bid represents a 31 percent premium over BNSF's closing share price Monday.

UBS Re-Emerges From 9 Quarters Of FICC Losses - WSJ.com

The fixed-income, currencies and commodities group at UBS (UBS), which bore the brunt of the Swiss bank's losses in the credit crisis, reported its first positive three-month period in more than two years, helping to edge the investment bank back into the black.

UBS Investment Bank reported an adjusted pretax profit of CHF66 million, excluding a CHF1.436m charge on its own debt as a result of credit spread tightening in the third quarter. This was the first positive three-month period in nine consecutive quarters.

The result was driven by CHF985 million in revenue from the FICC business. UBS reported a CHF4.518 billion loss in the same period of last year.
On a call this morning John Cryan, chief financial officer of UBS, said the FICC result was down to improved revenues in credit trading following several key hires, stable revenues in macro and the rates business picked up a little slack from the foreign exchange trading business, which experienced narrower spreads, lower volatilities and seasonally lower trading volumes.

UBS said it expects the investment bank's performance to continue to improve into 2010, but fourth quarter results will likely reflect the early stage of its recovery. It also expects another own credit charge in the fourth quarter, as a result of further tightening of its credit spreads.

Group-wide UBS reported a third-quarter loss of CHF564m, more than double the consensus forecast which was for a CHF228 million loss, according to Citigroup research. The result was impacted by accounting charges of CHF2.15 billion. Excluding these accounting charges, the underlying pretax profit was CHF1.557 billion.

Oswald Gruebel, group chief executive of UBS, and Kaspar Villiger, chairman of the board of directors, told shareholders in a letter today: "We have successfully stabilised the firm and our focus is now on growing the business...We intend to focus on building our capital strength and on de-risking our balance sheet for several quarters to come."

Singapore 3Q unemployment rises to 3.4 percent

SINGAPORE – Singapore's unemployment rate crept higher in the third quarter with a recession earlier this year triggering layoffs in the manufacturing sector.
The unemployment rate was a seasonally adjusted 3.4 percent in September, up from 3.3 percent in June, the Ministry of Manpower said in a statement Friday. The jobless rate was 1.9 percent in September 2008.
The jobless rate rose even as the economy added jobs overall, indicating new employment couldn't keep pace with the number of new job seekers entering the labor market.
The economy grew a net 15,400 jobs in the quarter, led by 13,400 in services and 8,100 in construction. The manufacturing sector, where employment largely tracks the strength of global demand for exports, lost 6,600 jobs. The economy had gained 55,700 jobs in the third quarter of 2008.
Gross domestic product expanded a seasonally adjusted annualized 15 percent in the July to September period, a second quarter of growth after a year of contractions. The government expects the economy to shrink up to 2.5 percent this year after growing 1.1 percent last year.

The Parisian at Angullia Park sold for $283m

The biggest private residential land sale in two years.
The freehold site has a site area of 49,113 sq. ft. It has a planning approval for a 36-storey development comprising 52 three and four bedroom units and two penthouses.

OUE bought The Parisian in a collective sale for $228.1 million in December 2006. It has paid the Development Charge and Differential Premium of about $23 million. The purchase price of $283 million equates to about $2,058 per square foot per plot ratio. The break even price is estimated to be $2,500 to $2,600 psf. Depending on the launch date, the selling price would be in the region of $3,500 psf.

Credit Suisse Posts 3Q Net Pft On Invest Banking

ZURICH (Dow Jones)--Credit Suisse Group (CS) Thursday matched buoyant third-quarter results from its healthiest U.S. rivals as earnings from its investment banking business helped push it to a larger-than-expected net profit, though analysts cautioned that blowout profits may be coming to an end.

The Zurich-based bank said net profit for the three months was 2.4 billion Swiss francs ($2.38 billion) compared with a loss of CHF1.3 billion in the year-earlier period. Analysts had forecast net profit of CHF1.72 billion.

As an outlook, Credit Suisse said it is confident of its position among competitors and is prepared for several possible scenarios.

'If markets remain constructive, we expect to be able to maintain our momentum. Even if markets become more difficult, we believe that Credit Suisse is positioned to perform well,' Chief Executive Brady Dougan said in a statement.

The investment bank swung to a CHF1.75 billion pretax profit - more than twice the private bank's figure. A year earlier, the investment bank posted a pretax loss CHF3.21 billion.

In particular, global interest-rate products, foreign-exchange trading, prime brokerage, cash equities leveraged buyout loans and trading in U.S. residential mortgage securities and derivatives made a strong showing in the recent quarter."

Deutsche Bank's Q3 profit tripled

Deutsche Bank has reported that its net profit more than tripled in the third quarter of this year, in the latest in a string of positive results from banks worldwide.
Germany's biggest bank said that, according to preliminary estimates, net profit was €1.4 billion, up from €440m in the same period a year ago.
Deutsche Bank said its results were boosted by a number of tax credits. Full results are due on October 29.

Home buyers prefer ‘mickey mouse' flats

The project Suites@Guillemard recently put up a sale of apartments of different sizes, which included units covering 258 square feet and an area equivalent to 21/2 car park lots. Offered units were priced at $1,450 per square foot or $374,000.

These are the smallest private apartments in Singapore, which shelled out a 312 square feet unit at Kent Residences.

It seems that home buyers are seeking for more so-called 'shoebox' or 'mickey mouse' flats in the market. Such flats cover an area of below 500 square feet. The trend set forth in the latter part of the previous year.

Laguna Park owners to sell at cheaper price

Unit owners in Laguna Park, whose tender unsuccessfully closed last Friday, have now considered selling at a cheaper price, ranging from S$950 million to S$1 billion.

According to Credo, the marketing agent of the development, the residents are likely to obtain letter of advice about the situation within the next 2 or 3 days.

Before, a lot of property analysts commented that the initial S$1.2 billion reserve price of Laguna Park was on the higher side.

JPMorgan profits boost Dow

US stocks surged on Wednesday after JPMorgan Chase kicked off the banks’ Q3 results season by announcing its biggest profit since 2007: $3.6bn in Q3 net income. The result easily beat analysts’ expectations and set a high bar for Goldman Sachs, Citigroup and Bank of America, which report later this week.

Meyer Place condominium up for collective sale

According to Cushman & Wakefield, the property consultants that are marketing the Meyer Place condominium located at the Meyer Road, the site should be sold for at least $65 million. Depending on the unit size, that would provide the 28 owners a sale price of $2.2 million–$3.3 million per unit.

The price works for $1,100 per square feet (psf) per plot ratio. It is based on a 2.1 maximum acceptable plot ratio. Director Christina Sim of Cushman & Wakefield, investment and capital market, said that if the homeowners are to individually sell the condominiums on the open market, these prices can translate to a premium of around 50 percent above the units’ value.

The fairly small freehold site located near the Katong Park, which covers a total land area of 28,167 square feet, also include a two-storey conservation building with four flats that must stay in any development of the land.

UBS hires former Goldman Sachs banker in Asia

NEW YORK (Reuters) - UBS AG hired a former Goldman Sachs Group Inc and Lazard banker for its Asian equity capital markets group, according to an internal memo obtained by Reuters.

Stuart Mackay, with 15 years of experience in investment banking and capital markets, will join the Hong Kong office of UBS as head of syndicate within the equity capital markets division, according to the memo."

Singapore moves to curb property market speculation

SINGAPORE, Sept 14 (Reuters) - Singapore will release more
land for development and make it harder for home buyers to
defer payments, steps aimed at curbing speculation in the
housing market and that drove down property stocks on Monday.

With immediate effect, banks and developers will not be
allowed to offer loans on homes under construction where the
borrower need only put down as little as a 5 percent cash
downpayment and defer repayment of the principal until after
building is completed.

The government also said it will reinstate its 'confirmed
list' of land sales in the first half of 2010 and increase the
supply of land available to developers.

'Given the current market conditions, the government has
decided to adopt several measures to temper the exuberance in
the market and pre-empt any speculative bubble from forming,'
National Development Minister Mah Bow Tan said in Parliament.

Laguna Park en-bloc sale

EAST COAST condominium Laguna Park was put on en-bloc sale for $1.2 billion on Wednesday.

The condo, which made headlines in the past year for its spate of vandalism cases due to disputes in its en bloc sale process, reached the 80 per cent consent level last December.

Its marketing agent Credo Real Estate said the tender was put on hold until now 'as major developers have only recently returned to the land market with confidence.'
If it succeeds in finding a buyer, Laguna Park wil be the second billion-dollar en bloc deal in Singapore, after the 618- unit Farrer Court which was sold to a CapitaLand-led consortium for $1.3388 billion.

Like Farrer Court, Laguna Park is an ex-HUDC estate in Marine Parade and was privatised in 2007.

At the current price tag, owners of the apartment units will receive sale proceeds ranging from S$2.1 million to S$2.3 million, while the penthouses will gain between S$3.5 million and S$4.1 million.

It is also one of the few sites that come under the amended Land Titles (Strata) Act meant to tighten the en bloc sales process, which came into effect in October 2007.
Laguna Park has a land area of about 677,493 sq ft and a gross plot ratio of 2.8 under the current 2008 Master Plan, with a building height of up to 36 storeys, subject to relevant approval.

Credo's deputy managing director Tan Hong Boon estimates that the buyer would be able to build close to 1.9 million sq ft of gross floor area or some 1,500 apartments with an average size of about 1,200 sq ft.

At $1.2 billion, the land price for the condo works out to about $844 per sq ft per plot ratio.

Citi banker is DBS CEO

DBS Group Holdings has named Citi veteran Piyush Gupta as its new chief executive, one of Singapore's most important corporate posts.

The CEO position was left vacant when Mr Richard Stanley, a former Citi colleague and good friend of Mr Gupta's, died of leukaemia in April aged 48.

Mr Gupta, 49, oversees South-east Asia and the Pacific for Citi from its Singapore office. He joins DBS in November. His appointment ends a five-month search.

GIC gives UBS share sale a miss

(SINGAPORE) The Swiss government has sold its entire 9.3 per cent stake in UBS for a tidy profit, less than a year after it poured six billion Swiss francs (S$8.15 billion) into the country's biggest bank.

The Government of Singapore Investment Corporation (GIC) said it did not buy any of the UBS shares sold by the Swiss government, but added that it remains confident of the long-term prospects of its earlier investment.

The Swiss government sold all 332.2 million UBS shares it controls to institutional investors for 16.50 francs each, or a total of some 5.48 billion francs, yesterday, the Swiss Federal Department of Finance said in a statement in German on its website.

The government will receive another 1.8 billion francs in cash from UBS as payment for waiving its right to future coupon payments on the mandatory convertible notes through which it held its investment in the bank.

Such notes earn interest like debt, but must be exchanged for ordinary shares by a fixed maturity date. The notes held by the Swiss government paid interest of 12.5 per cent a year, and were due to mature in June 2011.

In total, the government will receive 7.2 billion francs, or a profit of 1.2 billion francs on the sale of its six billion franc investment in UBS, it said.

Blackstone's Schwarzman tops U.S. CEO payroll: study | Reuters

BOSTON (Reuters) - Taking his private equity firm public paid off big for Blackstone Group LP's Stephen Schwarzman, who became the top-paid chief executive in the United States last year, a title he is likely to retain for some time, according to an analysis released on Thursday.

The vast bulk of Schwarzman's pay -- $699.8 million of a total $702.4 million -- reflected the vesting of equity grants he received when the company went public in 2007. The vesting will continue over the next four years.

"It is reasonably safe to assume that Mr. Schwarzman will remain at the top of (the) highest paid CEOs list, or close to it, for a few years to come," the report says

Property scene not too frothy: CDL

PROPERTY tycoon Kwek Leng Beng believes the Government may try to cool the property market - if it gets too frothy - by resuming its regular land sales programme as a way to boost supply.

However, the City Developments (CDL) chairman also said yesterday that the current buying momentum can be sustained and should not be seen as over-exuberant."

UBS hires M.Stanley banker to grow convertibles

LONDON, Aug 13 (Reuters) - UBS (UBSN.VX) (UBS.N) has hired Morgan Stanley's (MS.N) Armin Heuberger to head its equity-linked capital markets business for the Europe, Middle East and Africa (EMEA) region.

Morgan Stanley topped Thomson Reuters EMEA convertibles league table, underwriting 13 deals out of 35 issues so far this year, while UBS has handled three deals, including Air France-KLM's (AIRF.PA) $919 million convertible bond in June.

Heuberger will replace James Eves, who will take on a new role advising financial institutions on equity capital markets (ECM) in EMEA, according to an internal UBS e-mail.
Both will report to Peter Guenthardt, head of ECM for the region.

Heuberger was co-head of the same business at Morgan Stanley. He will now also run UBS's ECM business in Germany. (Reporting by Daisy Ku; Editing by David Holmes)"

AFP: Singapore property market booms despite recession

SINGAPORE — Despite Singapore's worst economic slump since independence, the residential property sector is in the midst of a new boom reminiscent of 2007, when the city-state was known as the world's hottest real estate market.

Greed and its twin brother fear are back in play as punters stake out condo launches days before sales open, with some offering blank cheques to pre-book flats, prompting the government to hint it may have to cool things down.

'Some of the practices and habits that you saw in the last property boom are beginning to come back, so I think we'll have to be careful,' said Minister for National Development Mah Bow Tan.

'A little bit of speculation is inevitable in every market, but when it becomes excessive, then it is something that we should try to avoid,' he said."

UBS Hires Bankers From Merrill, Goldman for Debt Unit

Aug. 11 (Bloomberg) -- UBS AG, Switzerland’s largest bank by assets, hired more than 20 senior bankers from competitors including Merrill Lynch & Co. and Goldman Sachs Group Inc. to strengthen its fixed-income division.

The hires include Dimitri Psyllidis, formerly at Merrill, who joined Zurich-based UBS to head foreign exchange and rates trading globally, according to a memo sent to staff yesterday. He will report to Carsten Kengeter and Jeffrey Mayer. Bobby Gerjarusak joined in Hong Kong from Goldman Sachs to run fixed- income, currency and commodities structuring in Asia-Pacific.

Goldman Sachs's Q2 net surges 65 per cent to $3.44 billion

Wall Street banking major Goldman Sachs on Tuesday reported a 65 per cent surge in profit at $3.44 billion on net revenues of $13.76 billion in the second quarter ended 26 June 2009.

Goldman Sachs, which recently returned federal bailout funds to the tune of $10 billion, had reported a profit of $2.09 billion and revenues worth $9.42 billion in the comparable period of the previous year.

Diluted earnings from shares rose to $4.93 in the second quarter from $4.58 in the first quarter. Annualised average return on equity rose to 23 per cent in the second quarter from 18.3 per cent in the first quarter.

Excluding one-time preferred dividend of $426 million related to the repurchase of the firm's TRAP common stock, diluted earnings per common share were $5,71 and annualised return on equity was 23.8 per cent for the second quarter and 19.2 per cent for the first half of 2009."

Morgan Stanley $100 Million Trading Days Fell to 22 in Quarter

Aug. 7 (Bloomberg) -- Morgan Stanley’s traders made $100 million or more on 22 days during the second quarter, compared with 24 days in the prior three-month period.
The company lost money on four days from April through June, down from 14 days in the previous quarter, the New York- based firm said today in a quarterly filing with the U.S. Securities and Exchange Commission.

Morgan Stanley, the sixth-biggest U.S. bank by assets, lags behind larger rival Goldman Sachs Group Inc. in trading revenue. During the second quarter, Goldman Sachs’s traders reaped $100 million or more on a record 46 of the firm’s 65 trading days, up from 34 days in the first quarter.

Morgan Stanley’s second-quarter fixed-income revenue of $973 million compared with $6.8 billion at Goldman Sachs, while equity trading revenue of $681 million compared with $3.18 billion at Goldman Sachs.

Top Firm's Trading Record Astounds Market

Bloomberg reports that Goldman Sachs, which managed to bag $3.44bn in the second-quarter, has astounded the market by its trading prowess in the period.

The news agency reports that, according to a Securities and Exchange Commission filing, Goldman only lost money on two trading days during April, May and June, and that the firm made at least $50m on 58 of the 65 trading days in the period. Goldman also reaped profits of at least $100m on 46 days, 71% of the time!

Many think that Goldman's trading success is built on some kind of black magic formula, or cooked up by special recipe. Well, it's not. Our Highly-Placed Professional says: 'Many firms increased VAR when it became clear earlier this year that there would be no financial meltdown, but Goldman has the biggest risk appetite, and some of the smartest people who trade perhaps the broadest portfolio of products out there. And, just as importantly, their risk management tools are among the best on the Street'.

Berkshire May Post Blockbuster Result, by CEO’s Gauge

Aug. 6 (Bloomberg) -- Berkshire Hathaway Inc., with a stock portfolio valued at more than $60 billion, may report its best quarter in at least two years using the metric preferred by the firm’s billionaire chairman, Warren Buffett.

About $11 billion in gains in Berkshire’s stocks and a recovery of derivative bets tied to equity markets caused book value, a measure of assets minus liabilities, to reverse after two quarters of declines, according to analysts and investors including Glenn Tongue at T2 Partners LLC. Berkshire is set to report second-quarter results tomorrow.

“It’s going to be a blockbuster,” said Tongue, whose New York-based firm’s largest holding is Berkshire shares. “It may well be the greatest dollar gain in book value in any quarter in the history of the company. Warren Buffett showed extraordinary discipline in the first quarter when all others were losing their heads.”

With RBS deal, ANZ gears up to take on HSBC, Citigroup

Sydney: Australia’s fourth biggest lender, Australia and New Zealand Banking Group Ltd (ANZ), which on Tuesday agreed to buy Asian assets from Royal Bank of Scotland Group Plc. (RBS), is prepared to take on the likes of Citigroup Inc. and HSBC Holdings Plc as it expands in the region.
ANZ is going to be a regional player, chief executive officer Michael Smith said in a Bloomberg television interview. “I don’t want to take on HSBC or a Citigroup in Latin America or in the states (US) or in Europe, but if it’s in our backyard, in this region, then yes, we’ll take them on.”

ANZ Bank will pay $550 million for the RBS businesses in Singapore, Taiwan, Indonesia, Hong Kong, the Philippines and Vietnam, the Melbourne-based bank said in a statement to the stock exchange.

Standard Chartered bank H1 profit up 5.5 percent, provisions for bad loans double

LONDON — Standard Chartered PLC reported Tuesday that first-half profit rose 5.5 percent compared with a year ago even as provisions for bad loans more than doubled to over a billion dollars.

The bank also announced a share placing to raise about 1 billion pounds ($1.7 billion) to support expansion in key markets in Asia, Africa and the Middle East. The placing comes six months after Standard Chartered raised $2.68 billion from a rights issue.

The bank said net profit was $1.88 billion compared with $1.79 billion in the first half of last year.

Standard Chartered said it achieved a record half-year operating profit of $2.8 billion, up 10 percent from a year earlier.

Provisions for losses on bad loans rose to $1.088 billion, up 133 percent from $465 million in the first half of 2008.

Standard Chartered said profit from wholesale banking rose 37 percent, offsetting poor results in some countries: profit in Korea fell 61 percent, partly due to the depreciation of the won; profit in the Middle East and South Asia fell 43 percent.

Nonetheless, Chief Executive Peter Sands said there were opportunities which Standard Chartered could seize with new funding.

“We have learned the power of playing from strength,” Sands said. “More capital will also enable us to take full advantage of the opportunities emerging from the crisis. Asia will emerge faster than the rest of the world.”"

Bank of America to pay $33m to settle Merrill bonuses case

Bank of America has agreed to pay $33m for charges of allegedly misleading investors about billions in bonuses it agreed to pay Merrill Lynch executives when it was on the verge of acquiring Merrill for $50bn in a 2008 merger, reports the New York Law Journal.

The payment settles a civil suit filed in the Southern District of New York by the Securities and Exchange Commission (SEC)."

UBS Posts $1.3 Billion Quarterly Loss

Swiss bank giant, UBS AG (NYSE: UBS), reported Tuesday a second-quarter net loss of 1.4 billion Swiss francs [CHF] ($1.31 billion) compared with 1.97 billion francs ($1.85 billion) in first quarter 2009. According to Switzerland’s biggest bank by assets, the results were driven by lower losses on risk positions from businesses now exited or in the process of being exited by the bank.

UBS said it recorded a credit loss expense of 388 million francs in Q2 compared with 1,135 million francs in Q1.The second quarter earnings included a 1.2 billion-CHF charge related to the company’s own debt, and a total operating income increase of 5,770 million CHF in Q2 from 4,970 million CHF in Q1.

The financial services firm also said its Q2 earnings included 582 million CHF in reorganization costs and a goodwill impairment of 492 million CHF related to the sale of Brazil’s UBS Pactual unit. The bank suffered $37.1 billion of outflows at its wealth and asset management divisions. The outflows were concentrated in the international business, whereas the Swiss domestic business remained stable. According to the firm, the US cross-border issue and its exit from the US cross-border business are having a major influence on the Q2 results.

The U.S. government and UBS struck a deal in principle on Friday to end tax litigation against the Swiss wealth management giant. As part of the deal, UBS will not pay a fine in exchange for handing over 5,000 names of U.S. clients holding secret Swiss accounts — about 10% of the names Washington was after.

“This is a positive development in a matter that has adversely affected our efforts to regain the trust of our clients and to restore momentum to our business,” Chief Executive Oswald Gruebel and Chairman Kaspar Villiger said of the prospective deal. [Reuters]

UBS, which on October of last year accepted a 6-billion-Swiss franc state cash injection after making $54 billion writedowns on toxic assets, said it reduced its balance sheet by a further 261 billion francs during the second quarter and held total assets of 1,600 billion francs on June 30, 2009.

Tracking the Property Market

Some condo I monitor .....

The Waterside

This has the upside of having enbloc potential should the market return again.

Price / Area (Sqft) / Unit Price ($psf) / Date
2,300,000 / 2,174 / 1,058 / Jun-09
2,525,000 / 2,411 / 1,047 / Jun-09
2,500,000 / 2,411 / 1,037 / Jun-09
1,600,000 / 2,142 / 747 / Apr-09
1,560,000 / 2,142 / 728 / Mar-09
1,680,000 / 2,142 / 784 / Mar-09
1,725,000 / 2,174 / 793 / Feb-09
3,068,000 / 2,400 / 1,278 / Sep-08
2,180,000 / 2,142 / 1,018 / Jul-08

Looks like prices has indeed recovered since Q1 2009

Botanical Gardens Area:

Project / Price / Area (Sqft) / Unit Price ($psf) / Date
BOTANIC GARDENS MANSION / 1,790,000 / 1,755 / 1,020 / Jun-09
BOTANIC GARDENS MANSION / 1,550,000 / 1,755 / 883 / Mar-09
BOTANIC GARDENS MANSION / 2,380,000 / 1,755 / 1,356 / Sep-08

Project / Price / Area (Sqft) / Unit Price ($psf) / Date

BOTANIKA / 2,856,000 / 2,034 / 1,404 / Jun-09
BOTANIKA / 2,150,000 / 1,539 / 1,397 / Jun-09
BOTANIKA / 5,579,520 / 2,906 / 1,920 / Sep-08

Project / Price / Area (Sqft) / Unit Price ($psf) / Date
BOTANIC GARDENS VIEW / 2,580,000 / 1,755 / 1,470 / Sep-08

Not too many transactions done but does seem to show signs of increases since Q1 2009

Recent Property Launches

More than 1,000 thronged Wing Tai's Ascentia Sky showflats in Redhill when the 373-unit condo was launched yesterday. It has sold 85 per cent of the 120 units put up, at prices of around $1,300 psf.

Far East Organization, for instance, resumed sales of its Silversea condo in Amber Road and has sold 57 of the 80 units released since July 10. Prices range from $1,200 to $1,700 psf.

It has also sold 80 per cent of the 182 units released at Vista Residences in Thomson, with prices from $1,100 psf.

The current fizz is setting new price benchmarks in suburbia, with the upcoming Centro Residences, next to AMK Hub, tipped to cross the $1,000 psf mark.

Another condo, Optima in Tanah Merah, which will preview at month's end, will be sold at around $900 psf. Its developer, TID, said it has had more than 1,000 inquiries.

UBS not to pay fine in U.S. tax settlement: reports

ZURICH (Reuters) - Switzerland's UBS will not have to pay a fine as part of the settlement of a tax evasion dispute with the United States, two Swiss newspapers reported on Sunday.
The NZZ am Sonntag and SonntagsZeitung both also reported that data of some 5,000 UBS clients would be released to the U.S. authorities. The two papers cited unnamed sources familiar with the case.

Spokesmen for the Swiss justice and the foreign ministry declined to comment on the reports. UBS was not immediately available.

The U.S. government and UBS struck a deal to settle a dispute over tax evasion and Switzerland's bank secrecy on Friday, heading off a showdown that had threatened to sour relations between the U.S. and Switzerland.

The main sticking point was that U.S. authorities wanted UBS to disclose the names of 52,000 wealthy American clients suspected of using the bank to evade taxes -- a demand that tested Switzerland's vaunted tradition of bank secrecy.

The parties still have to work out details, which are expected by Friday, when a new pretrial status conference is scheduled. The court trial against UBS has been reset for Aug 10, but would be called off if a final deal is signed.

Switzerland's top-diplomat Michael Ambuehl told the NZZ am Sonntag, the deal would not violate Swiss law.

"The Swiss legal system is maintained, because the U.S. have promised to act on the basis of the current agreements and to ask for legal assistance again," said Ambuehl, who is state secretary in the foreign ministry.

Swiss justice minister Eveline Widmer-Schlumpf, whose ministry is in charge of the negotiations together with the foreign ministry, said in a newspaper interview the parties had still to agree on important details.

"I am optimistic, that an agreement can be reached," she told Swiss paper Sonntag.
But she warned that worries of a failure were not unfounded.

"There are still details to be cleared, which are of importance to us," she said. "Should we not reach an agreement, which is in line with our Swiss laws, a deal would be put into question."

IN PRINCIPLE
Under the settlement, described as an "agreement in principle" expected to be finalized by next Friday, UBS is likely to reveal far fewer than 52,000 client names, but would include the biggest accounts, a U.S. government source had told Reuters.

UBS Chairman Kaspar Villiger said earlier this month the tax talks were focusing on client names rather than on a potential payment by UBS.

A U.S. government source who has followed the case closely had downplayed talk of a financial penalty."I don't think there's going to be a fine component at all," the source, who spoke on condition of anonymity, had told Reuters on Friday.

UBS, which is struggling to recover from the subprime crisis after posting the biggest annual loss in Swiss corporate history last year, agreed in February to pay $780 million to settle separate but related criminal tax fraud charges.

The bank will publish second quarter results on Tuesday and analysts expect it to report a loss of some 1.1 billion Swiss francs ($1.01 billion).

UBS Tax-Probe Settlement Nears as U.S., Swiss Reach Agreement

Aug. 1 (Bloomberg) -- UBS AG, the Swiss bank that’s set to report a third consecutive quarterly loss, may be close to resolving a U.S. tax probe that spurred defections by wealthy customers.
The U.S. and Switzerland “have reached an agreement in principle on the major issues,” U.S. Justice Department attorney Stuart Gibson said in a telephone conference call with U.S. District Judge Alan Gold yesterday. The remaining points will probably be settled in the next week, he said.

“Now they’ll be able to start rebuilding the brand,” said Teresa Nielsen, a Zurich-based analyst at Bank Vontobel who has a “hold” rating on UBS. “Once this issue is off the table, there are still others to solve.”

The U.S. sued UBS on Feb. 19, seeking names of 52,000 clients, a day after the largest Swiss bank by assets agreed to pay $780 million to defer prosecution for helping wealthy Americans evade taxes. Zurich-based UBS agreed then to an unprecedented breach of Swiss secrecy laws by giving the U.S. data on more than 250 accounts.

Judge Gold rescheduled an evidentiary hearing to Aug. 10, in case a deal isn’t reached. The IRS seeks the data because it suspects American account holders of evading taxes. Switzerland called the case a threat to its sovereignty and said it would force UBS to violate criminal laws protecting bank secrecy.

The parties declined to provide any additional information on the agreement, citing confidentiality.

Loss Estimate
UBS said on June 25 it expected a second-quarter loss. That follows $53.1 billion of writedowns since the financial crisis started in 2007, according to data compiled by Bloomberg. Analysts surveyed by Bloomberg estimate the second-quarter deficit will amount to 1.5 billion Swiss francs ($1.38 billion), compared with a 395 million-franc loss a year before.

UBS may book about 650 million francs in reorganization costs and 1.2 billion francs in own-debt charges when it publishes results on Aug. 4, the analysts estimate.

Chief Executive Officer Oswald Gruebel, who joined in February, said in a memo to employees last month that he saw “encouraging signs” in the quarter as operating earnings improved and writedowns decreased. An agreement to settle the U.S. lawsuit may bring UBS a step closer to Gruebel’s goal of halting outflows at the wealth-management unit, analysts said.

UBS rose 3.9 percent in Swiss trading yesterday after the agreement was announced. The stock is up 5.2 percent this year, compared with a 77 percent increase in Swiss competitor Credit Suisse Group AG and a 32 percent gain in the 63-company Bloomberg Europe Banks and Financial Services Index.

Possible Fine
The details of any settlement will determine its implications for UBS, analysts said. The bank may have to pay a fine of 1 billion francs, Huw van Steenis, a London-based analyst at Morgan Stanley, estimated last month.

“Paying 1 or 2 billion francs today after having written down more than $50 billion doesn’t make a big difference,” said Javier Lodeiro, a Zurich-based analyst at Bank Sal. Oppenheim with a “buy” rating on UBS. “If they have to disclose client names that probably wouldn’t be that good.”
UBS’s wealth-management units suffered 134 billion francs of net outflows since the second quarter of 2008, when it was made public that the U.S. Justice Department was investigating whether the bank helped American clients evade taxes.

Gruebel told employees in the July 14 memo that they “must do everything” to stop outflows from the money-managing units, which continued in the second quarter. He said he will outline plans to reorganize units on Aug. 4.

Weaker than Peers
“We are working on concrete strategic and operational plans group-wide as well as in the individual business areas,” Gruebel said.

Since joining UBS out of retirement, Gruebel cut 7,500 jobs, replaced three members of the executive board, sold the Brazilian Pactual unit and raised 3.8 billion francs in capital. He said the bank should focus on rebuilding and protecting its reputation, integrating its businesses more closely and increasing the quality and efficiency of servicing clients.

Underlying earnings are “still weak,” Matt Spick, an analyst at Deutsche Bank AG, said in a note. “This is at least in part because we expect continued weaker-than-peer performance in the investment bank, and because we do not expect the benefits of cost cutting to be visible until the third quarter.”

UBS’s securities unit may report a pretax loss of 1.66 billion francs for the second quarter, compared with a loss of 5.24 billion francs a year earlier, according to analysts’ estimates. The main wealth-management division may say earnings fell by half to 990 million francs as assets slumped.

The unit probably saw net withdrawals of 13 billion francs in the quarter, in addition to 5 billion francs of outflows from the wealth management Americas and asset management businesses, according to analysts.

Signs of speculation in Singapore private property market

SINGAPORE: The government is seeing some signs of speculation in the Singapore property market, according to National Development Minister Mah Bow Tan.

Speaking on the sidelines of the topping out ceremony of the Marina Bay Financial Centre on Wednesday morning, Mr Mah said the government is monitoring the situation.

It is uncertain if the buying momentum seen in recent months can be sustained, he added.

"The forecast is still for negative growth this year. Although it's not as negative as it was in the beginning of the year, I think there is still uncertainty... But what is important really is for all of us, all the players in the market, to make sure that the market remains healthy," said Mr Mah.

According to latest data from the Urban Redevelopment Authority (URA), sales of uncompleted private homes reached a record high of 1,825 units in June as improving sentiment in the market spurred homebuyers to snap up more units.

Mr Mah assured that there is adequate supply of units in the market for now and the government is prepared to release more land for sale if necessary.

On the Marina Bay Financial Centre, Mr Mah noted that it has already attracted over S$20 billion of private real estate investments from both local and international investors. About 61 per cent of space in the centre has been pre-leased.

Mr Mah also reiterated the government's commitment to the project, saying another S$1 billion in infrastructure works will be invested over the next 10 to 15 years. The figure is on top of the S$7.5 billion already invested in Marina Bay.

Deutsche Bank Q2 results

FRANKFURT (AP) — Deutsche Bank AG reported Tuesday a 67 percent rise in second-quarter net profit due to stronger corporate and investment banking and one-time charges that lowered the year-ago results. Shares slumped, however, due to write-downs and a cautious outlook.

The Frankfurt-based bank said net profit for the April-June period increased to euro1.1 billion ($1.6 billion) compared with euro645 million in the second quarter of 2008.

Revenues for the second quarter increased 46 percent to euro7.9 billion from euro5.4 billion in the second quarter of 2008, when revenues were hurt by euro2.3 billion in write-downs.
Deutsche Bank said it absorbed euro1.4 billion in charges during the quarter, mainly from provisions for credit losses and noninterest expenses, indicating the financial crisis' effects aren't totally over yet.

The results beat expectations on sales and earnings but some investors took profits on the stock after the report was released. Shares fell 4 percent to euro49.75 in Frankfurt morning trading.
Markets focused on the cautious outlook for the rest of the year, which rests on an overall turnaround in the global economy, and the reported writedowns.

"The outlook for the remainder of 2009 is strongly influenced by progress in the global economy," Josef Ackermann, the bank's chief executive said in a statement.
"In an uncertain environment, Deutsche Bank is well prepared. We have taken good advantage of improved conditions on financial markets, but we have also reduced costs and balance sheet risks, and strengthened our capital and liquidity base, all of which leaves us well-placed to confront near-term challenges," Ackermann said.

Ackermann added that the company has witnessed a stabilization of the world's banking industry and financial markets, and that increased liquidity and lower volatility were contributing to the bank's more profitable business performance.

UBS Hires Merrill's Magnus to Run Singapore, Malaysia Banking Team

UBS AG hired Keith Magnus from Merrill Lynch to run the Swiss bank's Singapore and Malaysia investment banking team, according to a person familiar with the situation, the latest blow to Bank of America Corp.'s efforts to keep its Asia investment banking team intact.

Singapore is a key market for investment banks in Asia.

The city-state is home to two of the world's most important state-owned investment firms, Temasek Holdings Pte. Ltd. and Government of Singapore Investment Corp. Singapore's equity market has stood out for investment banking activity this year as local firms launched rights issues to strengthen their balance sheets.

Mr. Magnus has advised on a number of those deals in recent months, including a rights issue totaling 1.84 billion Singapore dollars (about $1.28 billion) for Singaporean property developer CapitaLand Ltd.

Bank of America has lost several key Merrill bankers in recent months. They include its regional head of mergers and acquisitions, Kalpana Desai, and senior China banker Margaret Ren. One former Merrill banker, Sheldon Trainer, has won mandates from some of Merrill's clients in the region for his own boutique firm, PacBridge Partners Ltd.

Temasek and Charles Goodyear agree not to proceed with CEO appointment

Temasek Holdings and Charles ("Chip") W. Goodyear have mutually agreed not to proceed with the CEO appointment that was to have taken effect on 1 October 2009.

Mr Goodyear was appointed a member of the Board of Directors of Temasek Holdings (Private) Limited on February 1 and CEO-Designate on March 1 to succeed Ms Ho Ching as CEO. In a news release issued on Tuesday evening, Temasek said that four months into the leadership transition, the Board and Mr Goodyear concluded and accepted that there were differences regarding certain strategic issues that could not be resolved.

In light of the differences, both parties decided that it was in their mutual interests to terminate the leadership transition process and hence the executive relationship with effect from 15 August 2009.

Mr Goodyear will also step down from the Temasek Board, effective the same date. Chairman of Temasek Holdings, Mr Dhanabalan was quoted in the news release as saying, "It is with much regret that both Chip and the Board have accepted that it is best not to proceed with the leadership transition. "We wish Chip all the best in his future endeavours, and are happy that Ho Ching has agreed to continue as executive director and CEO."

Mr Goodyear who voiced regret at being unable to continue with the leadership transition described Temasek as having "a fantastic platform". Elaborating on the point, Ms Ho Ching said she hopes to complete the initiatives that started by Mr Goodyear.

Credit Suisse announce Q2 results

Investment bank Credit Suisse has reported net income of CHF 1.57bn for the second quarter of this year.

This marks a significant increase on the same period in 2008 which saw net income of CHF 1.22bn.

However, the previous quarter had seen higher profits of CHF 2bn.
Core net revenue was also up year-on-year, rising to CHF 8.61bn compared to CHF 7.74bn.
The quarterly results included some CHF 1.1bn of pre-tax net fair value charges, a discrete tax benefit of CHF 0.4bn and charges pertaining to the Huntsman Corporation settlement of CHF 0.5bn.

Without these exceptional items net income would have exceeded that recorded in Q1 2009.
Chief Executive Officer Brady W. Dougan has described the second quarter performance as a strong sign that the firm’s strategic approach to efficient capital and a client-focused ethos was working well.

Morgan Stanley posts Q2 loss

NEW YORK - MORGAN Stanley on Wednesday reported a third straight quarterly loss, falling further behind chief rival Goldman Sachs as fixed income and asset management results disappointed.

The results prompted Morgan Stanley Chief Financial Officer Colm Kelleher to label 2009 a 'year of transition'. 'We are not into the quick show of how good we are,' Kelleher said in an interview with Reuters Television. 'What we want to show is steady improvement, which we are doing, and fleshing out a model which we believe is robust, within which institutional securities is key.'

Morgan Stanley reported a loss of US$1.26 billion (S$1.81 billion), or US$1.10 per share, for the second quarter, compared with a profit of US$1.1 billion, or US$1.02 a share, a year earlier. Net revenue fell 11 per cent to US$5.4 billion.

Stripping out one-time items, Morgan Stanley posted a loss of US$1.37 a share, much worse than analysts' average forecast of a loss of 53 cents, according to Reuters Estimates.

Morgan Stanley struggled in key areas during the quarter, including commercial real estate, where it reported net losses of US$700 million amid declines in the market.

Home sales still going strong

When private home sales unexpectedly jumped in February, in the thick of Singapore's worst-ever recession, pundits called it a false dawn and warned that the rally would not last.

But now, the market has sustained its rebound for five straight months and is expected to keep growing.

Figures released last Wednesday showed that last month's new home sales hit a record high of 1,825, while recent news reports indicate that this month's sales figures will still be strong.

All this has prompted previously sceptical analysts to turn more decidedly positive on the sector.
At least three research houses - UOB Kay Hian, DMG & Partners and DBS Vickers - are now overweight on Singapore property, which means they see property stocks as better valued compared with stocks in other sectors.

Why the change in sentiment? Recent data offers a whole host of reasons, according to the analysts.

One is that the worst of the economic crisis is over, and Singapore in particular looks to have turned the corner. Last Tuesday, the Government said the economy jumped 20.4 per cent between March and June to rise out of recession, pulling up market confidence and the full-year growth forecast along with it.

In the same quarter, developers sold 4,714 brand-new units - already more than the 4,370 they sold for the whole of last year.

The improvement in home sales is also spreading to more segments of the market, said UOB Kay Hian's property analyst Vikrant Pandey.

While the rally in private home sales started in entry-level homes - a result of pent-up demand from HDB upgraders and genuine owner-occupiers shut out of the last property boom - the positive sentiment has widened to include pricier units.

Sales of high-end and luxury homes have gained traction recently, with 'a steady increase noted in the number of transactions above $1,500 per sq ft since the beginning of this year', said Mr Pandey.

Last month, high-end sales were boosted by the 146 units sold in One Devonshire in Somerset, at a median price of $1,771 psf. Three units were also sold above the benchmark price of $3,000 psf: at The Orchard Residences, Nassim Park Residences and The Ritz-Carlton Residences.

Most importantly, the rebound is pushing property prices up in some projects - and buyers are still biting.

Despite prices increasing by 5.2 per cent on average last month, buyers seemed undeterred, said DMG analyst Brandon Lee.

'We attribute it to the buoyant HDB upgrader demand, pent-up demand, low interest rates and improved macro-economic landscape.'

More pent-up demand may still be on the way, from buyers who sold their previous units en bloc and have yet to buy another home, said DBS Vickers analysts Adrian Chua and Lock Mun Yee in a report published last week.

They also take heart from the fact that long-held fears of an impending surge of new units have failed to deflate the market.

'We believe we should not see a short-lived spike unless prices rise beyond economic fundamentals,' they added.

But not all analysts are so upbeat.

OCBC's Mr Foo Sze Ming has maintained a neutral rating on the property sector because he thinks that there will be no additional impetus for home sales to keep rising.

In fact, he said the number of unsold suburban homes rose last month for the first time in four months - evidence that the pent-up demand from HDB upgraders has been gradually met.
What is now helping to drive demand for new homes is sideline liquidity from investors who see a chance to get in on the action.

But he said it remains uncertain as to how long this can last. Unless wages start rising again or foreign funds start coming in to buy Singapore property - neither of which Mr Foo thinks is likely to happen soon - the recovery may well peter out.

Of the stocks that analysts are now bullish about, City Developments seems one of the most popular due to its relatively large exposure to the Singapore residential market.

UOB Kay Hian and DBS also like Ho Bee, which has both mid-end and high-end projects, and Allgreen, which has at least two mid-tier projects launch-ready.

Bank Of America Posts Lower Q2 Profit

(RTTNews) - Financial services firm Bank of America Corp. (BAC: News ) Friday reported lower profit for the second quarter, hurt primarily by higher provision for credit losses and merger and restructuring charges. Strong performance of wholesale capital markets businesses and home loans led a significant rise in the company's revenues for the quarter. The bank also warned that continuing challenges in the global economy will affect its performance for the remainder of the year and into 2010.

Bank of America's second-quarter net income was $3.22 billion, down from $3.41 billion in the same quarter last year. Net income applicable to common shareholders declined to $2.42 billion from $3.22 billion in the year-ago quarter. On a per-share basis, the bank's net earnings were $0.33, compared with $0.72 in the previous year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude special items.Pretax, pre-provision income on a fully-taxable equivalent basis totaled $16.1 billion, up from $11.1 billion a year earlier.

The bank's total revenue, net of interest expense on a fully taxable-equivalent basis, rose 60% to $33.1 billion from $20.7 billion a year ago. Total revenue net of interest expense was $32.77 billion, up from $20.41 billion in the same quarter last year. Sixteen analysts had consensus revenue estimate of $33.10 billion for the quarter.

The bank said that results were driven by continued strong revenue performance in the wholesale capital markets businesses as well as in home loans, complemented by the previously announced gains on the sale of China Construction Bank, or CCB, shares and the sale of the company's merchant processing business to a joint venture.

The positives, however, were somewhat offset by continuing high credit costs, including additions to the reserve for loan and lease losses, as well as significant negative credit valuation adjustments on certain liabilities including the Merrill Lynch structured notes and the impact of a special Federal Deposit Insurance Corp., or FDIC, assessment.

Bank of America also reported a 9% rise in its second-quarter net interest income on a fully taxable-equivalent basis to $11.9 billion from $10.9 billion in the second quarter of 2008. The company attributed the net interest income growth to an improved rate environment and the addition of Countrywide and Merrill Lynch.

Non-interest income rose to $21.1 billion from $9.8 billion last year, including a $3.8 billion pretax gain from the completed sale of the merchant processing business to a joint venture. The non-interest income growth was also driven by a $5.3 billion pretax gain on the sale of CCB shares. Bank of America continues to own approximately 11% of the common shares of CCB.

JPMorgan Profits From Investment Bank; Defaults Rise

July 16 (Bloomberg) -- JPMorgan Chase & Co., the second- largest U.S. bank, said profit rose for the first time since 2007 on record investment-banking fees. Chief Executive Officer Jamie Dimon predicted more losses on consumer loans.

Second-quarter earnings increased to $2.7 billion, or 28 cents a share, from $2 billion a year earlier, the New York- based bank said today in a statement. The average estimate of 14 analysts surveyed by Bloomberg was 5 cents a share, including costs to repay government bailout funds and an assessment by the Federal Deposit Insurance Corp.

Investment-banking revenue from trading and stock and bond underwriting is helping offset rising defaults on consumer loans, such as mortgages and credit cards. Dimon said he doesn’t expect the card business to make a profit this year or in 2010, and the company increased its loss projections for prime and subprime mortgages.

“The credit problems, although they have stabilized, we’re still not out of the woods,” said Gerard Cassidy, a banking analyst at RBC Capital Markets in Portland, Maine, in a Bloomberg Radio interview. “For JPMorgan Chase, the challenge going forward is going to continue to be deterioration of credit.”

Goldman Q2 2009

NEW YORK, July 14 (Reuters) - Goldman Sachs Group Inc (GS.N) said the risk it encountered in commodities trading declined in the second quarter compared with a year ago, but revenues from the sector combined with fixed income and currencies were still at a record level.

Wall Street's leading investment bank said the FICC side of its business -- made up of fixed income, currencies and commodities -- generated $6.8 billion to help make the quarter ended June 26 its best ever with total revenues of $13.8 billion.

Singapore Q2 property prices drop 5.9 percent

Singapore real estate prices fell in the April-June period for a fourth straight quarter amid the city-state's worst ever recession.

Private residential property prices fell 5.9 percent in the second quarter from the previous quarter after plunging 14 percent in the first quarter, the Urban Redevelopment Authority said Wednesday.

The property survey was carried out in the first 10 weeks of the quarter, and the authority said it plans to release more complete figures later this month.

Singapore's gross domestic product fell a seasonally adjusted, annualized 14.6 percent in the first quarter. The government expects the economy to shrink as much as 9 percent this year.

Madoff Trial

NEW YORK (AFP) - - Wall Street swindler Bernard Madoff was sentenced Monday to 150 years in jail for masterminding an "evil" multi-billion-dollar investment scam that cheated thousands of people around the world.

"It is the judgment of this court that Bernard Madoff should be sentenced to 150 years in jail," Judge Denny Chin said as he handed down the maximum term possible on 11 charges of fraud, theft and perjury.

He described Madoff's crimes as "extraordinarily evil" and said it was "not merely a bloodless crime that takes place on paper but one that takes a staggering human toll."

The tough sentence came even after Madoff, the former chairman of the Nasdaq, made a courtroom apology to his victims. "I am sorry," he told them simply. "I don't ask for forgiveness."

At UBS, Mr. Grübel's Job Isn't Getting Any Easier

Still buffeted by the financial crisis, UBS AG's move to boost its capital base underlines its continuing struggles to return to profitability even as its competitors are minting money.

The bank raised 3.8 billion Swiss francs ($3.5 billion) late last week by placing 293 million shares, or 8.4% of its capital, with a few investment institutions. It marked the fourth time in less than two years that UBS shareholders have suffered a dilution of their holdings.

At the same time, the bank announced it would post a loss for the second quarter and said customers continued to pull money from its flagship wealth-management business.

The announcement emphasized the hill the bank's new boss, Oswald Grübel, a former top banker with rival Credit Suisse Group AG who took over in February, must still climb to turn around the bank.

Many of UBS's high-net-worth customers have been scared off by the bank's dispute with the U.S. Internal Revenue Service, which wants it to hand over details of 52,000 accounts. A civil trial over that demand is scheduled to start July 13 in a federal court in Miami unless a settlement is reached.

The share placement appears to have been pressed upon the bank by the Swiss authorities, concerned about further deterioration in borrower creditworthiness in the face of recession, analysts said.

The Swiss government "wants to see higher capital levels so that banks can absorb losses because Switzerland would struggle to do so," said David Williams, an analyst at Fox-Pitt Kelton. Swiss bank assets are equal to more than six times Swiss gross domestic product.

UBS took pains to highlight that it isn't raising capital due to one isolated, negative event, but instead to "take advantage of current market opportunities."

UBS announces net loss expectations for Q2 2009

Jun 26, 2009 -Financial services firm UBS AG (NYSE:UBS) (SWX:UBSN) reported on Thursday that it expects to incur a net loss for its second quarter 2009, based on preliminary results for April and May and estimated results for June.

Its own previously announced credit and restructuring charges will account for most of the expected loss. The quarterly operating result will improve, compared to the first quarter of 2009, as market conditions are better, affecting the Investment Bank, along with lower losses and write downs on legacy risk positions.

In the quarter to date, net new money has been negative in the three wealth and asset management divisions.

The group's Tier 1 capital ratio at 30 June 2009 is expected to be higher than at 31 March 2009 due to a reduction in risk-weighted assets. This ratio is not affected by own credit charges.

The second quarter financial results will be reported by UBS on 4 August 2009.

UBS names new Asia Pacific CEO

HONG KONG, June 25 (Reuters) - UBS AG (UBSN.VX) on Thursday announced the appointment of Chi-Won Yoon as chairman and CEO of Asia Pacific, succeeding Rory Tapner, who is leaving the bank after 25 years.

Yoon joined UBS in 1997 as Head of Equity Derivatives, becoming Head of Asia Equities in 2004, Head of Asia Pacific Equities in 2008, and Head of Equities and Fixed Income for the region earlier this year.

Yoon inherits a franchise with a strong equities and M&A platform across Asia Pacific. But the bank also faces several challenges.

Among the first obstacles is getting the new leadership in place. Robert Rankin, the region's former head of the investment bank, stepped down earlier this year. People inside and outside the bank credited Rankin with playing a key role in building UBS' business in Asia. The bank filled Rankin's shoes with its Asia Pacific head of M&A and its head of Financial Institutions Group.

UBS, like it's peers, also lost a lot of bankers in Asia, either through layoffs or to other banks. After posting huge losses from exposure to subprime mortgage securities, the bank severely cut back on bonuses, which prompted many to leave.

The bank also lost two highly respected Asia Pacific derivatives bankers earlier this year and a team of bankers in that group to a rival. But despite some setbacks, UBS has kept its Asia Pacific franchise largely in tact, remaining one of the top equities house in the region.

In addition to 9,500 employees in Asia Pacific, the bank says it has the largest wealth management business in the region.

Tapner took over the top Asia role in April 2004, after 5 years in London as joint global head of investment banking. In an interview with Reuters, Tapner said he will fly back to London on Friday to be with his family. His wife and four children remained in London during his Asia tenure, he said, knowing how much travel time he'd have to log as CEO of the region.

"The targets he set, to substantially grow our revenues and profits from the region, have all been achieved, and the share of group revenues represented by APAC now exceed 20 percent," said UBS CEO Oswald Grubel in an internal memo obtained by Reuters. "This from a business that represents only 6 percent of the group's balance sheet and risk weighted assets, and employs 11 percent of our global workforce." Tapner also led the execution of the bank's China strategy, the memo says.

Yoon holds a bachelor's degree in Electrical Engineering and a master's in Finance from the Massachusetts Institute of Technology. After starting out as an electrical engineer for the U.S. space shuttle program, he joined Wall Street in 1986 covering derivatives.

Property market warning

THE optimism in Singapore's property market is unsustainable, given an impending over-supply of new flats, weak rental demand and the fact that the country remains in a recession. That is the pessimistic view of two research houses, which concluded that the price recovery is highly fragile.

Citigroup said the market is not at the start of a cyclical upswing and that the spike in home prices cannot last. 'We caution against over-optimism, because fundamentally the market is not ready for a sustained price recovery,' analyst Wendy Koh wrote in a report on Thursday.
In the same report, she downgraded Allgreen to 'sell', putting the developer in the same 'sell' basket as City Developments, CapitaLand and Keppel Land. Citi also downgraded Wing Tai to 'hold'. While there has been strong resale demand, the call for new homes is patchy and rental demand remains weak, Ms Koh said.

Resale prices of some projects have risen and some developers are reducing discounts for new projects but Nomura Singapore believes these seemingly positive factors are misleading. It maintained that the demand for new homes was boosted by price discounting and the interest absorption scheme.

'A rapid deterioration in rents amid higher supply and weaker demand has undermined yield expectations,' it said. Nomura also pointed to the damaging effect of rising unsold inventory and forced sales by defaulting or distressed buyers who bought on deferred payment. These properties form a source of 'hidden' inventory that will place further pressure on asking prices.

Temasek loses £500m on Barclays sell-off

Temasek, the Singapore state investment company, sold out of its shareholdings in Barclaysthis year, making an estimated £500m ($815m) loss on its investment. Temasek reduced its stake of almost 2 per cent in the UK's third-largest bank over several weeks from the turn of the year, according to people familiar with the sale.

Barclays shares fell as low as 51p in January on fears that it would join the list of UK banks needing a government bail-out. Since early March, however, they have risen fivefold amid a broader recovery. They fell 14.5p yesterday to close at 259p.

By contrast, Abu Dhabi-based International Petroleum Investment Company generated a healthy profit from its Barclays investment. IPIC sold its entire holding of 1.3bn shares on Tuesday, turning a £3.5bn investment into £5bn in seven months.

GIC to retain holdings in Citigroup and UBS

The Government of Singapore Investment Corporation (GIC) says it will maintain its investments in Citigroup and UBS, despite the gloomy outlook for Western financial institutions.

This comes days after news that Temasek Holdings had sold its stake in Bank of America (BOA), resulting in an estimated loss of several billion dollars. GIC currently has an 11 per cent stake in Citigroup, while its stake in UBS amounts to about nine per cent.

Observers say UBS and Citigroup have significant holdings in Asia and other high growth regions, which could recover more quickly from the downturn. And this could benefit GIC in the long term.

Arjuna Mahendran, Head of Asia Investment Strategy, HSBC, said: "By investing in these two very large investment banks, an investor who has a strategic holding in the equity of those banks would perhaps have access to the deal flow that emanates from their investment banking operations. And that is a huge positive if you are running a large sovereign wealth fund."

UBS Said to Raise Bankers’ Base Pay by 50% After Bonus Cuts

May 15 (Bloomberg) -- UBS AG, the European bank with the biggest losses from the financial crisis, plans to boost salaries for senior bankers by an average of 50 percent to stem defections, three people with knowledge of the matter said.

The salary increase would apply to managing directors in investment banking, fixed income and equities worldwide, said the people, who declined to be identified because the matter is confidential. Less senior bankers, including associate directors and executive directors, may also get raises, they said.

UBS cut its bonus pool by 78 percent in January after amassing the biggest loss in Swiss corporate history in 2008. The bank came under pressure from government officials to slash variable pay after the Swiss state provided capital to UBS and helped shift hard-to-trade assets off its books. Bank of America Corp., which bought Merrill Lynch & Co., said in March it might raise salaries as a proportion of compensation.

“If the base goes up, it’s because bonuses are going down,” said Jason Kennedy, a London-based investment-banking recruiter. “It’s the same shrinking pie, you’re just stealing from Peter to pay Paul.”

Managing directors at the Zurich-based company currently earn about $190,000 to $250,000 a year in base pay, Kennedy said. Executive directors and directors earn from $150,000 to $200,000, he estimated.

To help retain senior bankers, UBS set aside about 900 million Swiss francs ($811 million) for bonus payments over the next three years in a plan to tie compensation to longer-term profitability. The payments will depend on both the bank and the employee’s division being profitable, and on UBS accepting no further capital from the state, the company said in February.

New rules will make UBS smaller

The Swiss National Bank (SNB) says that new capital requirements will reduce the balance sheet of UBS, Switzerland's largest bank.

Executive board member Thomas Jordan, referring to last year's rescue package for UBS, told a panel discussion in Biel that lessons had been learned.

"We want a bank that is clearly smaller," he commented.

UBS was forced to write down about $50 billion (SFr55.14 billion) as a result of the subprime mortgage crisis in the United States and was bailed out by the Swiss government and the SNB, the country's central bank.

During the same discussion, the director of the Swiss federal financial administration, Peter Siegenthaler, highlighted the importance of new regulation in the banking sector.

"It is important that the regulator Finma [Swiss Financial Market Supervisory Authority] adjusts the framework in a way that forces the bank to reduce risks," he said.

Finma has given the banks until 2013 to meet the new rules, which also include a nominal cap on a bank's debt level regardless of the risks involved.

swissinfo.ch and Reuters

Stocks Gain on Stress Tests, Treasuries Rise

May 8 (Bloomberg) -- Stocks gained around the world as Federal Reserve Chairman Ben S. Bernanke said a review of banks’ health “should provide considerable comfort” and a report showing fewer job losses than forecast signaled the worst of the recession is over. Treasuries and oil gained. The dollar fell.
Citigroup Inc

Stress Test

The official results of the US stress-tests on 19 of the nation's largest financial institutions will be officially announced when the US equity markets close Thursday.

The banks which are required to raise additional capital will be given a month to provide the US Treasury and the Federal Reserve with their plans. The capital will need to be raised within a further 6 months. US authorities are hopeful that the firms will be able to raise the capital privately, either through new stock offerings or converting preference shares to common equity.

Another alternative is to sell assets to beef up the balance sheet. Although clearly not official yet, detailed below are what the media is claiming are leaked details of the results of the tests:

American Express - no capital required (Bloomberg)

Bank of America - $33.9bn (The New York Times)

Bank of New York Mellon - no capital required (The New York Times)

Capital One Financial - no capital required (The New York Times)

Citi - $5 - $6bn (The New York Times)

GMAC - $11.5bn (Reuters)

Goldman Sachs - no capital required (Bloomberg)

JPMorgan Chase - no capital required (The New York Times)

MetLife - no capital required (Bloomberg)

Morgan Stanley - $1.5bn (The Wall Street Journal)

Wells Fargo - $15bn (Bloomberg)

Regions Financial is also thought to be required to raise additional capital, but the amount has not been disclosed (The Wall Street Journal).

UBS Headcount Cuts

The Financial Times reports that UBS's wealth management unit is to bear the brunt of the 8,700 job cuts the bank aims to make by the end of next year.

According to the newspaper, some 4,000 wealth management jobs are likely to go, many of them in the US and Switzerland. The investment bank, which has already seen headcount fall by around a third since its 2007 peak, is likely to suffer some 2,500 additional job losses, while 500 staff in asset management and another 500 in the bank's corporate centre in Zurich also face the axe.

UBS reports Q1 loss of CHF 2.0 bln

UBS reports Q1 loss of CHF 2.0 bln; quarter-end BIS tier 1 ratio of 10.5% Co reports Q1 net loss attributable to shareholders of CHF 1,975 mln.

Losses were driven primarily by risk positions in businesses now exited or in the process of being exited by the Investment Bank. Results include a CHF 0.6 bln goodwill impairment charge related to the announced sale of UBS Pactual.

Net new money outflows totaled CHF 23.4 bln for Wealth Management & Swiss Bank; Wealth Management Americas reported net new money inflows of CHF 16.2 bln; net new money outflows slowed to CHF 7.7 bln in Global Asset Management

Capital and balance sheet:
Bank reports BIS tier 1 ratio of 10.5% and BIS total ratio of 14.7% at quarter-end; pro-forma BIS tier 1 ratio of 11.0% including the effect of the announced sale of UBS Pactual.

Total risk-weighted assets under Basel II declined 8.1% during the first quarter to CHF 277.7 bln.

As announced on 15 April 2009, operating expenses expected to decrease by CHF 3.5 to 4 bln by the end of 2010.

Outlook: Co notes there has been an improvement in market sentiment during the first quarter, with a strong rebound in global stock market indices since early March, but the credit markets improved only partly and trading in complex financial products remains illiquid. The markets continue to be unsettled, and UBS remain cautious on the immediate outlook for UBS.

The strong influence that government policy has on the market environment was clearly demonstrated in the first quarter as investors became less risk averse. However, the real economy has continued to deteriorate, and this is expected to have negative implications for credit-related provisioning in coming quarters.

UBS Replaces Johansson as Head of Investment Bank After Losses

April 27 (Bloomberg) -- UBS AG, the European bank with the largest losses from the credit crisis, replaced Jerker Johansson as head of its investment bank as Chief Executive Officer Oswald Gruebel shakes up management two months after joining.

UBS named Alexander Wilmot-Sitwell and Carsten Kengeter co- heads of the division. Johansson, 52, who joined UBS in March 2008 after 22 years at Morgan Stanley, has resigned with immediate effect, Zurich-based UBS said in a statement today.

The appointment is the second change among top executives since Gruebel, the former CEO of Credit Suisse Group AG, was hired out of retirement in February. Gruebel, 65, named Ulrich Koerner chief operating officer earlier this month, announced an additional 7,500 job cuts and agreed to sell the Brazilian banking operations to reduce risk and free up capital.

“Gruebel is reviewing the senior management at UBS and making the changes that he believes to be necessary to create his UBS,” Peter Thorne, a London-based analyst with Helvea, said in a note. “We look for the new management team to accelerate the transformation of the investment bank.”

Treasury says about $110B left in bailout fund

WASHINGTON (AP) -- Only $109.6 billion in resources remain in the government's $700 billion financial rescue fund.

But Treasury Department officials said Tuesday they expect the fund will be boosted over the next year by about $25 billion as some institutions pay back money they have received. That would boost the total to $134.6 billion.

UBS to Sell Brazilian Unit

ZURICH -- UBS AG said Monday it will sell Banco Pactual back to one of the Brazilian investment bank's original owners at a loss, a move that will lift the Swiss bank's capital.
UBS said Pactual will be sold for $2.5 billion to BTG Investments, a firm run by Andre Esteves, the former Pactual partner who briefly ran UBS's troubled fixed-income business before exiting the Swiss bank last summer.

UBS said the sale is in keeping with its strategy to reduce risk and strengthen its balance sheet, a push reinforced by new Chief Executive Oswald Grübel, who was hired in February to steer UBS through what now amounts to over $50 billion in write-downs.

The move shows that Mr. Grübel, who last week said he wants to cut spending by up to 4 billion Swiss francs ($3.43 billion) by next year -- including through an 11% reduction of its work force -- won't shirk from further painful steps to restore UBS's profitability.

Despite incurring a loss on the sale, UBS said the move will bolster its Tier 1 ratio -- a measure of capital strength -- by 0.6%, meaning its first-quarter ratio will stand at roughly 10.6%.
"The increase in the Tier 1 ratio, albeit only 60 basis points, is welcomed as the Tier 1 ratio had fallen to around 10% after the first-quarter loss," said Peter Thorne, analyst at independent brokerage Helvea.