UBS posts loss after US bad debt

Swiss investment bank UBS has reported a worse-than-expected third quarter loss, hit by its exposure to bad debt in the sub-prime US mortgage sector.

For the three months until the end of September, UBS made a pre-tax loss of 726m Swiss francs ($625m; £304m), its first loss in almost five years.

UBS first warned about its bad debt exposure at the start of the month UBS said it expected to make a profit for the final three months of 2007.

However, it cautioned that further bad debt write-downs might be necessary in the near future.

'Strengthening work'

UBS first warned at the start of this month that its exposure to US mortgage bad debt was about 4bn Swiss francs.

It is the latest global bank to indicate how much it has lost as a result of exposure to investment products linked to US sub-prime mortgages.

UBS's 726m Swiss francs loss compares with a profit of 2.2bn Swiss francs for the same period last year.

"Our third quarter result was unquestionably disappointing," said UBS's new chief executive Marcel Rohner.

"We are also taking steps to strengthen our market risk management and control framework."

Mr Rohner replaced Peter Wuffli in the top job at UBS in July.

Although no reason was given for Mr Wuffli's departure, his leaving followed after three quarters of falling profits and $300m losses at a failed hedge fund.

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