UBS Confirms 3Q Loss

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UBS AG said its third-quarter loss will be in line with a profit warning earlier this month, but primed investors for further write-downs due to U.S. mortgage-securities the bank still holds.

The Zurich-based bank said it will Tuesday post a pretax loss of between 600 million and 800 million Swiss francs ($517 million and $690 million), as flagged earlier this month when the bank was forced to disclose massive write-downs and sweeping management changes as a result of the subprime mortgage woes.

UBS said the current quarter has started positively in all its units, including the investment bank, where the recent trouble has centered.

However, the bank cautioned that it may record further write-downs in the future because it remains exposed to the deteriorating market in the U.S. for mortgage-securities.

"As a result, UBS is not assuming that the quarter will continue as positively as it has begun, or that the current difficulties will be resolved in the short term," UBS said in a statement.

The bank's third-quarter report is scheduled for 0600 GMT Tuesday.

Investors had been fearful UBS would post a worse loss than flagged after U.S. rival Merrill Lynch & Co Inc. (MER) surprised the market last week with far larger third-quarter loss than originally indicated. UBS said it made the statement to refute a Swiss weekend media report, which suggested the losses may have spread further.

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