UBS write-downs could double

By Andrew Hurst, European Banking Correspondent

ZURICH (Reuters) - Swiss bank UBS could face billions of dollars more in subprime-related write-downs in 2008, which could tip it into a second year of losses, analysts warned investors, sending its shares tumbling again.

Some said UBS might be only halfway through clearing the debris from the subprime loan disaster that has already saddled it with $18 billion in charges in 2007.

The prognosis knocked UBS shares down 5.93 percent to 35.24 francs by 1130 GMT on Friday, a day after falling 8 percent on the news that the company had at least $80 billion in exposure to subprime loans and other risky debt, nearly three times more than it had previously disclosed.

"The disaster is much worse than we had thought," said Dirk Becker, analyst at Landsbanki Kepler in Frankfurt. "It looks like they face another very bad year, and a loss for 2008 is not inconceivable."

Equity analysts at Citigroup said UBS might have to spend 12 to 20 billion Swiss francs on additional write-downs.

Others, including Lehman Brothers, which tallied UBS's exposures at $97.3 billion, said a write-down of 10 billion francs was on the cards.

"A further 10 billion Sfr write-down would eliminate all profit for 2008, which would likely be a negative for the stock price," said Lehman in a note.

A UBS spokesman said on Friday "our exposures are disclosed", but declined to comment on speculation of more write-downs.