UBS HAS moved closer towards ending state involvement in the bank after it raised $3.5 billion (€2.48 billion) of new capital, but must still settle US legal problems and stem client withdrawals to return to health.

UBS, the world’s largest wealth manager and one of the banks hit hardest by the financial crisis, said it is to place 293.3 million new shares at 13 francs a share with a few big institutional investors.

It also said it expected to post a second-quarter loss due to debt and restructuring charges, although its operating results, helped by improved investment banking conditions and lower losses and writedowns, should be better.

The Swiss National Bank and banking regulator FINMA have indicated they want UBS to strengthen its capital base before the government withdraws a six billion Swiss francs investment made in October to bail out the bank.

“We welcome that the bank has strengthened its capital base,” said FINMA head Eugen Haltiner. “We can call the bank well-capitalised . . . The bank is now prepared to weather an unexpectedly difficult economic scenario.”

Nicolas Michellod, from Boston-based financial research and consulting firm Celent, said UBS was taking advantage of relative calm in the financial markets to raise cash with the ultimate aim of ending government involvement in the bank.

“The goal overall is to get back to a normal modus operandi and get rid of political forces influencing strategic decisions at the top of the bank,” he said. – (Reuters)