UBS sees tough 2008, unveils new exposure

Swiss bank UBS said it expected 2008 to be a difficult year after it unveiled $26.6 billion in new exposure to risky US mortgages, but would not say if it would return to profit in early 2008 after huge losses in 2007.

UBS's net subprime exposure at end-December was $27.594 billion, down from $29 billion at the end of November. But the bank unveiled an additional $26.6 billion in exposure to so-called Alt-A mortgages, which are of higher quality than subprime loans but also considered risky.

The bank took a $2 billion charge on exposure to the Alt-A mortgages. UBS also took a charge of $871 million on credit protection bought from monoline bond insurers.

Some analysts had predicted that huge write-downs, running to $18.4 billion, by UBS on its subprime exposures would frighten away wealthy clients.

UBS Chief executive Officer Marcel Rohner told journalists in a conference call that the bank continued to reduce exposure in January, but declined to make a forecast for first quarter results, saying market conditions were particularly challenging. (Reuters)