UBS Confirms Loss; More Writedowns possible

| About: UBS Group (UBS)

UBS confirmed Monday it would report a Q3 loss of 600M-800M Swiss francs on Tuesday and said further writedowns were possible going forward. The announcement came after a weekend report speculating the loss may be bigger than predicted early this month when UBS said it would take a 4B franc charge related to its fixed-income portfolio, after larger than anticipated write-downs led Merrill Lynch to the biggest quarterly loss in its history last week. The loss will be UBS's first in five years. The bleeding may not be over, however, as UBS said the portfolio "remains exposed to further deterioration in the U.S. housing and mortgage markets as well as ratings downgrades for mortgage-related securities, which could lead to further writedowns on the positions." Even though it noted that Q4 had begun with good results, UBS said it "is not assuming that the quarter will continue as positively as it has begun, or that current difficulties will be resolved in the short term." That uncertainty has led some to question the bank's standing, as one money manager said: "UBS was always supposed to be stable, and this year the losses are worse than at other banks."

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Tagged: , Foreign Money Center Banks, Earnings, Switzerland
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