More writedowns coming at UBS

UBS will report more writedowns in its second-quarter results, due on August 12, the Swiss bank warned today.

UBS warned that its investment banking arm had made losses on various positions, "in particular credit valuation adjustments on monoline insurance exposures". Even with a Sfr3 billion ($2.9 billion) tax credit and positive results from the wealth management and asset management arms, the bank could still report an overall loss for the quarter, UBS said - assuming the wealth and asset management arms contribute the same amount as in the first quarter of the year, this would mean an investment banking loss of around Sfr 5 billion.

In the first quarter of 2008, UBS reported losses of Sfr11.5 billion, which included $19 billion of writedowns on its US real estate and structured credit holdings. At the end of the quarter on March 31, it still had $6.3 billion of monoline exposure, $17.1 billion exposure to US Alt-A residential mortgages, $6.3 billion to US commercial real estate and $15.6 billion to US subprime mortgages. The bank has been one of the worst-hit by the US subprime crisis, with total writedowns of more than $24 billion since the crisis began in mid-2007.

However, UBS said that after its successful Sfr16 billion rights issue in June this year it would not seek to raise more equity.

See also: 5,500 jobs to go at UBS as losses continue
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