Swiss bank UBS has agreed to buy back stabilization fund (StabFund) from Swiss National Bank (SNB) for US$3.762 billion.
UBS will pay SNB US$1 billion and half of the remaining amount. The payment will reflect in the national bank’s 2013 annual results.
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SNB StabFund was created in October 2008 to bailout the financially troubled UBS. The fund took over the bank’s illiquid assets worth US$38.7 billion, while the Swiss Confederation invested CHF6 billion in UBS’ convertible notes.
The repurchase of fund signals the end of Swiss Government support to UBS.
SNB in a statement said that the transfer of the StabFund to UBS represents the successful conclusion of a challenging undertaking and one which, for the SNB, was out of the normal run of business.
"From a financial point of view, it has gained interest income of a total of US$1.6 billion over the term of the loan in addition to its US$3.762 billion share in the equity.
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By GlobalData"However, attaining a profit was never an objective in its own right. The prime reason for the establishment of the StabFund was its contribution to strengthening the Swiss financial system," it said.
