SINGAPORE, July 26 (Reuters) - Singapore sovereign fund GIC, which owns significant stakes in UBS and Citigroup , said its long-term view on the two banks has not changed despite the introduction of higher capital requirements that is likely to reduce future profitability of the banking industry.
“All global banks are likely to be affected to some extent by the new Basel III international capital rules,” Ng Kok Song, the Government of Singapore Investment Corp or GIC’s chief investment officer, was quoted as saying by the Business Times.
“But our investment thesis for Citi and UBS was based on our assessment of their long term business potential.”
The Singapore fund briefs local media on its performance, but does not usually invite international press.
GIC’s original investment of 11 billion Swiss francs in UBS, made in March 2008, is still showing a paper loss of some 5.6 billion francs, the Business Times reported. By contrast, its remaining stake in Citigroup is showing an unrealised gain of some $1.1 billion, the paper said, citing its own calculations.
GIC owns about 6.4 percent stake in UBS and 3.86 percent stake in Citigroup even after selling half its stake in the U.S. bank in 2009. (Reporting by Kevin Lim; Editing by Saeed Azhar)