UBS may post writedowns, raise cash: Citigroup

The Zurich-based company, which wrote down $38 billion over the past three quarters, still carries $83 billion of "risk exposures that are likely to require further markdowns," London- based Citigroup analyst Jeremy Sigee said in a note today.

Sigee, who rates UBS a "hold" with a "high risk" caveat, estimates the company may post a loss of 4.5 billion Swiss francs ($4.4 billion), and announce writedowns of as much as 7 billion francs when it reports second-quarter earnings August 12. JPMorgan Chase & Co analysts yesterday said UBS may need to mark down its assets by a further 5.1 billion francs.

Sigee blamed a slump in financial markets for asset price declines, and said UBS may need to raise more capital, either from asset sales or from shareholders. Kurer, in remarks published by Swiss newspaper Finanz & Wirtschaft yesterday, said the bank won't need more funds.

UBS fell 62 centimes, or 3 per cent, to 20 francs by 9:51 am in Swiss trading, bringing declines this year to 57 per cent.

Banks and securities firms have turned to investors for $322 billion to replenish reserves after $403 billion of writedowns and credit losses tied to the collapse of the US sub-prime mortgage market. UBS trails only Citigroup in credit losses and capital raising after turning to investors for $29.5 billion since the credit crisis started a year ago.

Speculation financial firms would need more funds helped drive an index of European banking shares down 8.3 per cent in the previous five days.