UBS to write down extra $5 billion in H2: report

The logo of Swiss UBS bank is seen behind a construction fence in front of an office in Zurich August 19, 2008. REUTERS/Arnd Wiegmann

ZURICH (Reuters) - Swiss bank UBS UBSN.VX will have to write down another $5 billion on its risky investments in the second half of the year, a newspaper reported on Sunday.

Without citing its sources, the Sonntags Zeitung newspaper said its research had shown that new writedowns would be necessary due to ongoing turmoil on the credit markets. A UBS spokesman declined to comment.

The paper said it expected UBS to update the market shortly before an extraordinary shareholders meeting on October 2 after the third quarter closes at the end of September.

Last month, UBS, Europe’s worst casualty of the credit crisis, said writedowns climbed a further $5 billion in the second quarter to top $42 billion.

Sonntags Zeitung said it expected UBS to write down $1 billion on subprime mortgages and $1 billion on Alt-A loans that are made to borrowers with less than prime credit ratings but who are above subprime.

The paper also predicted about $2 billion in write downs on UBS’s investments in monoline bond insurers and about $1 billion on student loans but said the company was unlikely to seek to raise more new capital.

In addition, Sonntags Zeitung cited analysts as saying that UBS might have to book about $2 billion in losses on its own debts in the second half.

Reporting by Emma Thomasson; Editing by Richard Hubbard