Embattled UBS Wraps Up $15Bln Bumper Rights Issue

FRANKFURT -- UBS has wrapped up a 16 billion franc ($15.4 billion) rights issue, the Swiss bank's second effort to resuscitate finances ravaged by the global markets crisis.

It is the latest in a line of major banks, including Britain's Royal Bank of Scotland, HBOS and France's Credit Agricole, to go cap in hand to shareholders. In total, European banks are raising more than $40 billion from shell-shocked investors.

UBS said Friday that 99.4 percent of the issue, priced at 21 francs, was taken up.

UBS, once a rock of Swiss financial prowess, is now Europe's biggest casualty of the financial crisis sparked by U.S. mortgage defaults, having written $37 billion off its credit investments, twice the figure at Royal Bank of Scotland.

There are also signs that its prized wealthy clientele are growing nervous; money flows into its wealth management business slowed to a trickle in the first three months of the year.

Dieter Ewald, a fund manager at UBS shareholder Frankfurt Trust, said such concerns had prompted him recently to pare back his investment in the Swiss bank.

"UBS is handicapped," he said. "We are worried that wealth management will be hit. We want to see that the new management can bring it back on track, and then we would invest more again."

At roughly 24 euros, UBS shares are worth about one-third of what they were a year ago.

The capital hike will see a shift in its shareholder base away from traditional fund investors in London, for example, toward hedge funds or the oil-rich Middle East, bankers and analysts have said.

This is the second time that UBS has had to reinflate its capital base. In February, shareholders grudgingly approved an injection of 13 billion Swiss francs from Singapore and an unnamed Middle East investor.