UBS Faces Gruebel Gloom Until 2011 as Withdrawals Curb Recovery


By Elena Logutenkova
Bloomberg.com


Aug. 24 (Bloomberg) -- In 24 hours UBS AG settled a six- month tax dispute with the U.S. and freed itself from partial ownership by the Swiss government. Investors applauded, sending the shares up 11 percent in Zurich trading.

Now Switzerland’s largest bank by assets is bracing for a cold shower. It must stop rich clients from fleeing, rebuild its investment-banking division and return to profit after 38.5 billion francs ($36.4 billion) of losses over the past eight quarters. Meeting those challenges may take years.

“I’m cautious of how quickly a recovery may come through,â€