Union Bancaire Privee (UBP) was quoted on Thursday as saying that it had a $700 million exposure to the alleged $50 billion securities fraud by Wall Street veteran Bernard Madoff.
The Geneva-based bank that invests in funds of hedge funds denounced the "massive fraud" but said its exposure was less than 1 percent of its portfolio, which was some 126 billion Swiss francs ($117.2 billion) as of June 30.
Christophe Bernard, responsible for UBP investment policy, told the daily Le Temps: "The exposure of the accounts under our discretionary management mandate and our funds of alternative funds is 700 million dollars, or 800 million Swiss francs."
"The financial solidity of the bank is not affected and remains top flight," he added.
The daily Le Temps, citing unnamed banking sources, had previously estimated UPB's losses at some 1 billion Swiss francs.
The bank did not have any investments of its own with Madoff, whom it had last visited in late November, according to Bernard.
UBP had done its "due diligence," fulfilling its fiduciary duty, and had had faith that the SEC's surveillance was strict.
Dinvest Total Return, its main fund of alternative funds, lost 3 percent, bringing its loss to 21 percent for the year, he said.
Overall, its alternative portfolios hit by the alleged fraud had exposure of 2 to 5 percent, he said.
"On the other hand, we have reduced significantly the weight of hedge funds in the portfolios of our clients," he added.
(Reporting by Stephanie Nebehay)
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