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Paine Webber Will Post $55-Million Loss for '90

January 11, 1991|From Associated Press

NEW YORK — Paine Webber Group Inc. said Thursday that it will post a 1990 loss of about $55 million, the latest indication of the recession sweeping Wall Street.

Paine Webber said it would lose $95 million in the last three months of the year, when it took a $24-million charge against earnings to pay for severance and space costs associated with 400 layoffs.

The firm also said it increased its reserves for merchant banking investments by $71 million in the quarter. Such deals, in which firms invest their own money until a client can pay back debt, have been a major source of Wall Street troubles.

Paine Webber Chairman Donald B. Marron said in a letter to the firm's officers and investment executives that the financial changes "while painful in the short term, have a very positive impact on the firm's financial condition going forward."

Marron also said that, in an effort to strengthen the firm's balance sheet, it increased its total capital to $1.56 billion from $1.52 billion in 1989, including the fourth-quarter reserves.

The 1990 loss contrasts with a profit of $51 million in 1989.

Paine Webber said it was satisfied with the performance of its core businesses in 1990.

Marron said its retail stock sales division was profitable in every quarter, and its institutional sales and trading unit "was solidly profitable in our core equity businesses, both domestic and international."

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