GIC cuts stake in Swiss bank UBS at a loss

SINGAPORE: Singapore sovereign wealth fund GIC said on Tuesday it has sold, at a loss, almost half its stake in Swiss bank UBS, which it bought early in the global financial crisis.

GIC said in a statement it was “disappointed” with the loss but added that conditions had changed since it bought the stake and it now made sense to invest the money elsewhere. The fund said its holdings in the Zurich-based bank had dropped to 2.7 per cent from 5.1 per cent.

“GIC made the UBS sale despite the loss because conditions have changed fundamentally since GIC invested in UBS in February 2008, as have UBS’ strategy and business,” said GIC chief executive Lim Chow Kiat.

“It makes sense now for GIC to reduce its ownership of UBS and to redeploy these resources elsewhere.” No amount was disclosed for the losses.

Analysts say UBS is focused on its wealth management business after giving up ambitions to become a top global investment bank.

UBS and other global banks received massive capital injections from various investors such as GIC as they reeled from the financial crisis sparked by the collapse of the US housing market.

GIC in late 2007 injected 11 billion Swiss francs ($10.2 billion at the time) into UBS, and in January 2008 said it would pump $6.88 billion into US banking giant Citigroup. — AFP