UBS 'to write down $7bn more'

3 July 2008

Swiss bank UBS could be forced to raise new capital after posting a further $6.9 billion of credit crunch-related writedowns in its next profits declaration, a Citigroup analyst has said.

In his note, Jeremy Sigee added that the firm still had "risk exposures" to securities which have declined in value since the onset of the financial crisis.

This is the latest in a series of blows for the troubled bank, which has written off around $38 billion of assets due to the credit crunch since last year.

UBS has also been severely embarrassed by federal prosecutors' investigations into some of its wealthy US clients, who have been accused of hiding $20 billion of their own assets in order to avoid income tax.

Earlier this week, the judge at the trial of ex-employee Bradley Birkenfeld decided that the bank should be forced to disclose the names of these clients, and how much they hid from tax authorities.

Speaking to Swiss newspaper Finanz & Wirtschaft yesterday, UBS chairman Peter Kurer denied speculation that the bank needed more funds.

He added that the US investigation was being taken "most seriously".

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