Swiss Gov't Earns $938Mn in UBS Bailout

Swiss gov't earns $938Mn on $60Bn bailout.

(From NYTs) PARIS — Switzerland’s government said Thursday that it was in the process of selling its stake in the giant bank U.B.S., a transaction that it expects will generate about one billion Swiss francs, or $938 million, in profit for taxpayers. The Swiss government, in the throes of last Fall’s global financial crisis, stepped in to invest $60Bn in taxpayers’ bail-out funds to help that nation’s largest bank.

Officials confirmed details of the sale following a deal announced Wednesday to turn over information on wealthy American citizens who are clients of U.B.S., and are suspected by the U.S. Internal Revenue Service of using Swiss bank accounts to evade paying their taxes.

 In October, the Swiss government had injected 6 billion francs, or $5.6 billion, into the troubled lender in exchange for mandatory convertible notes that would have given it an 8.5 percent stake in the bank if converted. The government said on several occasions since then that it wanted to sell its stake as soon as justifiable, but that U.B.S. had to be on solid financial ground first.

The Swiss government and regulators now judge that to be the case in the wake of the deal with Washington and after a capital increase completed June 30 lifted the bank’s Tier 1 capital ratio, a measure of financial strength, to 13.2 percent from 10.5 percent at the end of March. Read more here.