February 10, 2009 / 10:41 AM / 11 years ago

TIMELINE: Key events in subprime fallout at UBS

(Reuters) - UBS AG, the world’s largest wealth manager in terms of assets, posted the biggest ever annual loss for a Swiss company on Tuesday.

Following are key events in the subprime mortgage-related crisis and ensuing economic downturn that impacted UBS:

* CLOSES DILLON READ HEDGE FUND UNIT - MAY 3, 2007

UBS shocks investors by closing down its Dillon Read hedge fund unit after posting lower-than-expected first-quarter results, then a rare event from the bank, whose track record had earned it a reputation as a serial outperformer.

* WRITEDOWNS TO CAUSE THIRD-QUARTER LOSS - OCT 1, 2007

UBS warns a 4 billion Swiss franc subprime hit would cause a third-quarter pretax loss. A few weeks later, UBS reports a quarterly loss of 726 million Swiss francs, its first quarterly loss in nine years.

* MORE WRITEDOWNS - JAN 30, 2008

UBS announces another writedown, this time for $4 billion. Two weeks later the bank posts a full-year loss of 4.4 billion Swiss francs. Shareholders then back a $11.9 billion capital injection from Singapore and an unidentified Middle East investor.

* WRITEDOWNS DOUBLE, DUMPS CHAIRMAN OSPEL - APRIL 1, 2008

UBS doubles its writedowns from the subprime crisis, dumps its chairman, Marcel Ospel, and seeks more emergency capital. It proposes its lawyer, Peter Kurer, as Ospel’s successor.

Activist investor and former chief executive Luqman Arnold then demands UBS shake up its governance and structure.

* SLASHES JOBS - MAY 6, 2008

UBS says it will axe 5,500 jobs and sell billions of dollars of ailing assets in a bid to break free from the subprime crisis. The bank launches a $15.6 billion rights issue at a third below its market price to repair its battered balance sheet.

* EX-UBS BANKER PLEADS GUILTY TO TAX EVASION - JUNE 19, 2008

A former UBS banker who once smuggled a client’s diamonds into the United States in a toothpaste tube pleads guilty to helping a billionaire hide $200 million in assets from U.S. tax authorities, part of a broader tax evasion probe of UBS.

* SPLITS WEALTH MANAGEMENT, INVESTMENT BANK - AUG 12, 2008

UBS says it will separate its prized wealth management business from investment banking, acknowledging flaws in its much-vaunted one-bank strategy. It also reports a second-quarter loss of 358 million Swiss francs.

* GETS STATE BAILOUT, UNLOADS TOXIC ASSETS - OCT 16, 2008

UBS says it is getting 6 billion Swiss francs from the Swiss government in return for a 9.3 percent stake and is unloading $60 billion of toxic assets into a new central bank fund.

* REPORTS RECORD OUTFLOWS, SAYS TURNS CORNER - NOV 4, 2008

UBS reports net outflows of 83.6 billion francs for its core wealth management and asset management divisions in the third quarter, but says it has seen encouraging signs in client flows since the October 16 government deal.

* US CHARGES TOP BANKER WITH HIDING ASSETS - NOV 12, 2008

The head of UBS AG’s wealth management business, Raoul Weil, is charged with conspiring to help thousands of wealthy Americans hide $20 billion of assets from U.S. tax authorities in Swiss bank accounts.

* BIGGEST EVER ANNUAL LOSS FOR SWISS COMPANY - FEB 10, 2009

UBS posts the biggest ever annual loss for a Swiss company, but says client withdrawals reversed in January and it will axe 2,000 more jobs as it restructures to focus on wealth management.

Reporting by Sam Cage; editing by Simon Jessop

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