UBS reports a $713 million third quarter loss after subprime write-downs

31 October 2007

Mumbai: Swiss banking group UBS AG reported a net loss of 830 Swiss francs ($713 million) in the third quarter - its first quarterly loss in five years - after hefty write-downs on subprime-related investments, but said it expects to turn in a group profit in the last quarter.

UBS, which reported a profit of 2.2 billion francs a year ago, said troubles in the United States subprime mortgage market led to big write-downs and losses in its investment banking unit.

UBS, Europe''s largest bank by assets, is among the many large financial institutions to suffer the effects of the recent credit crunch, which sent values of many mortgage-related securities sharply lower.

Of the largest financial firms, UBS and Merrill Lynch were among the few that posted a loss - as opposed to a decline in profits - for the latest quarter.

UBS, which took a 4.2 billion Swiss francs ($3.6 billion) charge on subprime-related losses in fixed income in the third quarter, said it expected to return to profitably in the fourth quarter.

The Swiss bank said that it is "unlikely that the investment bank will contribute positively to UBS''s results for the last three months of the year.