Spanish investors are scrambling to protect their money in the wake of the country’s economic crisis, and one of the best ways to do so is by taking advantage of its most popular investment tool.
The country’s largest banks are among the best in the world to invest, with banks that are widely regarded as the safest in the industry, according to the International Crisis Group.
While that is a point of pride for Spanish savers, there are risks associated with these investments as well.
In a world where a lot of money is flowing out of the United States, many savers are looking to invest as well, and some are using this opportunity to make a quick buck.
That’s exactly what happened with Spanish bank UBS, which last week reported a loss of $2.4 billion on the sale of a portfolio that included its assets in China.
The bank had already reported $2 billion in losses last year, but a report this week from the Spanish news agency EFE shows that UBS is now reporting a loss on its China investments of $3.4 million.
That would be the largest single loss for a single Chinese company.
This is not the first time UBS has experienced a financial crisis.
It has been hit by a string of scandals that have forced the bank to cut back its capital, reduce its staff, and even halt new investment in China, all of which have hurt the company’s bottom line.
Investors should beware of a similar fate for UBS.
While UBS was already struggling to recover from the economic downturn, this new report makes it clear that there are some investors out there who may want to make money in China as well — even if they are not the ones who are making a quick bucks.
As we reported in October, the bank is now a “hot investment” for Chinese investors after Chinese regulators approved a new plan to allow the bank’s Chinese employees to transfer funds into the country, and it was recently revealed that U.S. and British financial institutions are interested in acquiring a stake in UBS as well after a report from The Wall Street Journal last week said UBS might be interested in buying another Chinese bank, China Merchants Bank.
That means that UBTS might become one of China’s largest investment firms.
While the Chinese market for U.BTS is limited, it is the largest foreign bank in China and the company is one of its largest shareholder in a number of Chinese companies, including Huawei Technologies, the countrys largest mobile phone maker.
If UBS continues to fail, investors may see another round of capital cuts in China — this time with a vengeance.
That may be bad news for some U.K. savers who are hoping that the bank will have a bright future, and the same is true for investors in France and Germany.
The German bank Berenberg is one that is rumored to be interested and will also see a bump in capital as it looks to expand its business in China after the European Union imposed strict capital controls earlier this year.
This article originally appeared on CNBC.com.