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The Swiss government made a profit of at least Swfr1 billion (£570 million) today as it sold the share stake it took last October to bail-out UBS — the country's largest bank and Europe's biggest casualty of the credit crunch.
The move followed a deal last night between UBS and US tax authorities, in which the bank agreed to reveal details of some 4500 private bank accounts held by US citizens accused of evading tax.
The Swiss government injected Swfr6 billion (£3.4 billion) into UBS last year through convertible notes. It will now convert these into shares, which were placed with institutional investors today. The 322 million shares represent a little more than 9% of the bank's total equity. At today's placing price of Swfr16.50, the government's stake generated Swfr5.5 billion.
The shares were placed at a modest 4% discount to the market price of Swfr17.20. UBS will also pay the Swiss government a cash fee of Swfr1.8 billion, which represents the future coupon on the notes through to their original expiry date in 2011. That means the government has made 20% profit on the bailout in just 10 months.
