PREVIEW-UBS gains relief, but concerns linger ahead of Q2

* UBS second-quarter results

* Tuesday, Aug 12, 0500 GMT

* Q2 net loss seen at $260 million in Reuters poll [ID:nL7654059] conducted before news of debt securities buyback

By Sam Cage

ZURICH, Aug 11 (Reuters) - UBS AG's (UBSN.VX) hard-hit stock gained some much-needed relief on Monday, helped by its settlement of a U.S. probe, but concerns about the impact of the credit crunch lingered ahead of its second-quarter results.

Investors welcomed news out late on Friday that the world's biggest wealth manager will take a less-then-expected charge of $900 million to settle U.S. charges over its sale of debt securities, when it reports second-quarter earnings on Tuesday.

UBS -- Europe's hardest-hit victim of the credit crisis, having notched up $37 billion in write-downs -- has already said a tax credit will save it from another loss in the quarter.

"Despite this additional significant burden, UBS still expects to report these results consistent with guidance given on 4 July, i.e. close to break-even, including a 3 billion Swiss franc tax asset," said Landsbanki Kepler analyst Dirk Becker.

"With problems still mounting and the danger of a third capital increase still not completely off the agenda we keep our 'Reduce' rating," Becker said.

UBS shares rose 3.3 percent to 22.72 Swiss francs by 0917 GMT, outpacing a 0.8 percent gain in the European bank sector .SX7P, but they are still only worth about a third of where they were trading before the financial crisis hit a year ago.

The stock was also helped by reports that two executives from Swiss insurers -- Swiss Life Holding AG's (SLHN.VX) Bruno Gehrig and Zurich Financial Services AG's (ZURN.VX) James Schiro, seen as safe pairs of hands -- could join its board.

On Friday, UBS agreed to buy back $18.6 billion of so-called auction-rate securities whose value collapsed during the global financial crisis and pay $150 million to settle charges it misled investors [ID:nN08460327]. UBS was expected to post a second-quarter loss of $260 million, according to a Reuters poll conducted before the news of the debt securities buyback.

The focus on Tuesday, since UBS has already given an indication of its results, will be on the booking of any more write-downs of toxic assets. Credit Suisse analysts see write-downs of 5.5 billion francs ($5.11 billion) in UBS's investment bank.

"What is interesting are details for the segments, the amount of net new money outflows in Wealth Management and how much the bank has reduced its exposure to toxic assets," said WestLB analyst Georg Kanders.