UPDATE 5-UBS sees earnings at risk, ups 2008 net loss

* UBS revised 2008 net loss 20.9 bln Sfr after U.S. fine

* Sees earnings at risk for some time, extremely cautious

* Net new money remains positive in U.S., but not elsewhere

* Global asset management experiences net outflows

* Shares up 0.5 pct after opening 3.8 pct down (Adds more details on net new money, more analyst comments)

By Martin de Sa'Pinto and Lisa Jucca

ZURICH, March 11 (Reuters) - UBS (UBSN.VX)(UBS.N) said earnings would remain at risk due to volatile markets, as it revised up its 2008 net loss to 20.9 billion Swiss francs ($18.06 billion), to include a big U.S. tax fine and more writedowns.

UBS was also more downbeat than a month ago about client flows, saying that net new money remained positive in its wealth management Americas unit, but this was partially offset by net outflows in wealth management elsewhere and in its Swiss bank.

UBS, which is struggling to rebuild its reputation after being hit hard in the credit crisis, said in its annual report that it had revised up its 2008 net loss by 1.2 billion francs from the 19.7 billion francs it reported last month, already the biggest loss in Swiss corporate history.

"Even after substantial risk reduction, our balance sheet remains exposed to illiquid and volatile markets and our earnings will therefore remain at risk for some time to come," UBS said in a letter to shareholders in its annual report.

"Our near-term outlook remains extremely cautious," UBS added in its first forward-looking statement with input from new Chief Executive Oswald Gruebel, a former Credit Suisse (CSGN.VX) chairman appointed late last month to turn around the firm.

Analysts said Gruebel was trying to grapple with the bank giant's crisis by getting all the bad news out at once.

"The new CEO is probably trying to do some kitchen sinking," said Andreas Venditti, an analyst at ZKB, meaning Greubel intends to announce all of the bad financial news in one go.

Shares in UBS opened 3.8 percent down after the revised loss and cautious outlook, but then turned positive and were trading 0.5 percent up at 9.84 Swiss francs at 1343 GMT, while the Dow Jones index of European bank stocks was up 2.8 percent .SX7P.

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