<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Sep 15, 2008
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ZURICH - SHARES in Swiss bank UBS AG took a new tumble on Monday, falling further than a hard-hit banking sector after reports it will have to write down another $5 billion (S$7.17 billion) on its risky investments in the second half of the year.
News that lack of liquidity had forced US investment bank Lehman Brothers to file for bankruptcy protection dragged down financial sector stocks worldwide.
Without quoting sources, Swiss paper Sonntags Zeitung said UBS, Europe's hardest hit bank in the financial market turmoil, would have to write down another $5 billion on its risky investments in the second half.
The paper said it expected UBS to update the market before an Oct. 2 shareholder meeting. UBS declined to comment.
'The bad news is that the banking crisis is not over and that there are still lots of bad credits around,' Mr Claude Zehnder, head of research for technical trading at Zuercher Kantonalbank, said.
'Also, the possibility has arisen this weekend of further writedowns,' he added.
UBS announced last month writedowns had climbed a further $5 billion in the second quarter to top $42 billion, and said it was splitting the investment bank that had dragged it into the red from its core wealth management business.
UBS shares were down 10.1 per cent at 21.14 Swiss francs at 0815 GMT, underperforming the DJ Stoxx European banks index, which was down 5.8 per cent. UBS shares had rallied recently after losing two-thirds of their value in the last year.
UBS's immediate rival Credit Suisse was down 6 percent at 49.50 Swiss francs.
Both UBS and Credit Suisse declined to comment on their banks' potential exposure to Lehman Brothers.
A source close to UBS told Reuters the bank's exposure to Lehman was 'small', but would not elaborate further.
US headache
Separately, the Financial Times reported the bank was close to clinching a deal with US authorities over allegedly helping wealthy US citizens to avoid paying taxes by hiding assets in Switzerland.
UBS was trying to reach a deal with the US Justice Department and regulators within the next two weeks, in time for the shareholder meeting, the Financial Times reported on Monday, citing well-placed UBS sources.
'UBS is treating these investigations with the utmost seriousness and continues to work diligently with both Swiss and US government authorities in an effort to achieve a satisfactory resolution of these matters,' a UBS spokesman said.
In May, the US Department of Justice and the Securities and Exchange Commission revealed they were investigating UBS's conduct in relation to cross-border services provided by UBS advisers to US clients from 2000 to 2007. Swiss Finance Minister Hans-Rudolf Merz has warned UBS not to breach Swiss banking secrecy rules by handing over client details to US authorities investigating tax evasion. -- REUTERS
</TR><!-- headline one : start --><TR>UBS shares hit by speculation <!--10 min-->
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"-->
ZURICH - SHARES in Swiss bank UBS AG took a new tumble on Monday, falling further than a hard-hit banking sector after reports it will have to write down another $5 billion (S$7.17 billion) on its risky investments in the second half of the year.
News that lack of liquidity had forced US investment bank Lehman Brothers to file for bankruptcy protection dragged down financial sector stocks worldwide.
Without quoting sources, Swiss paper Sonntags Zeitung said UBS, Europe's hardest hit bank in the financial market turmoil, would have to write down another $5 billion on its risky investments in the second half.
The paper said it expected UBS to update the market before an Oct. 2 shareholder meeting. UBS declined to comment.
'The bad news is that the banking crisis is not over and that there are still lots of bad credits around,' Mr Claude Zehnder, head of research for technical trading at Zuercher Kantonalbank, said.
'Also, the possibility has arisen this weekend of further writedowns,' he added.
UBS announced last month writedowns had climbed a further $5 billion in the second quarter to top $42 billion, and said it was splitting the investment bank that had dragged it into the red from its core wealth management business.
UBS shares were down 10.1 per cent at 21.14 Swiss francs at 0815 GMT, underperforming the DJ Stoxx European banks index, which was down 5.8 per cent. UBS shares had rallied recently after losing two-thirds of their value in the last year.
UBS's immediate rival Credit Suisse was down 6 percent at 49.50 Swiss francs.
Both UBS and Credit Suisse declined to comment on their banks' potential exposure to Lehman Brothers.
A source close to UBS told Reuters the bank's exposure to Lehman was 'small', but would not elaborate further.
US headache
Separately, the Financial Times reported the bank was close to clinching a deal with US authorities over allegedly helping wealthy US citizens to avoid paying taxes by hiding assets in Switzerland.
UBS was trying to reach a deal with the US Justice Department and regulators within the next two weeks, in time for the shareholder meeting, the Financial Times reported on Monday, citing well-placed UBS sources.
'UBS is treating these investigations with the utmost seriousness and continues to work diligently with both Swiss and US government authorities in an effort to achieve a satisfactory resolution of these matters,' a UBS spokesman said.
In May, the US Department of Justice and the Securities and Exchange Commission revealed they were investigating UBS's conduct in relation to cross-border services provided by UBS advisers to US clients from 2000 to 2007. Swiss Finance Minister Hans-Rudolf Merz has warned UBS not to breach Swiss banking secrecy rules by handing over client details to US authorities investigating tax evasion. -- REUTERS
