Struggling Swiss bank UBS has written down another $19 billion on the value of its assets, causing a net loss of $12 billion for the first quarter of this year. It also said it would seek $15 billion in new capital through a rights issue of shares.
The latest writedown was the biggest single subprime hit so far worldwide.
The moves, though expected, deal a new blow to the bank, still reeling under the weight of billions of dollars in bad investments.
The bank's chairman, Marcel Ospel, has been forced to step down. He is being replaced by Peter Kurer.
The choice of Kurer - who joined the bank as general counsel in 2001 and who has sat on the executive board since 2002 - has been questioned by some investors.
UBS said it would create a new division to deal with the ailing assets after its mortgage-related positions deteriorated further in the quarter, in a clear move to draw a line under the crisis which has shaken investor confidence in the Swiss bank.
While the group was able to reduce some of its exposure to ailing debt, other potential risks increased and its overall position in US mortgages deteriorated further.
The writedowns come at the upper end of expectations and on top of $18.4 billion in damage caused by the sub-prime crisis last year. This had already forced the bank to seek shareholder approval for $19 billion in capital-raising measures in February.
The creation of a so-called work-out unit, sometimes called a 'bad bank', would allow UBS to load the credit problems into a separate division, permitting management to focus on the group's profitable operations.
Switzerland's banking watchdog said it should have probed UBS further after the bank gave assurances last March its subprime exposure was under control.
