UBS may take $7.1B charge

The Swiss banking giant joins a growing list of financial institutions that are taking multibillion dollar losses on their debt holdings, report says.

UBS, the Swiss financial services giant, will take a multibillion write-down due to risky debt holdings linked to the deteriorating housing market, according to a news report.

The Wall Street Journal reported on its website Wednesday that "expectations are growing" that UBS will take a charge of as much as $7.1 billion (eight billion Swiss francs) in the fourth quarter. The losses stem from complex investment vehicles that are tied to the home mortgage crisis and have fallen sharply in value in recent months.

UBS has already taken a similar charge of 4 billion Swiss francs.
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The newspaper also warned that there's more pain in store for some of the world's largest financial institutions. Barclay's, the British bank, will announce Thursday a write-down of about $2.9 billion, the Journal said, citing an anonymous source.

Meanwhile, Citigroup, which has already disclosed more than $20 billion in losses, may take additional charges.

The paper didn't say whether additional charges were also in store for Merrill Lynch, which has suffered steep losses. But noted Deutsche Bank analyst Michael Mayo told Fortune recently that the bank could take as much as $10 billion in additional write-downs in the fourth quarter.

Citigroup declined comment. A UBS spokesman, referring to the company's guidance in late October, told the paper that the company's investment bank would likely post a loss in the fourth quarter, but that the parent company should report a profit.

Meanwhile, Bear Stearns announced Wednesday that it plans to take a $1.2 billion write-down in the fourth-quarter. HSBC, citing the U.S. mortgage market, also said Wednesday that it was taking a $3.4 billion charge against third-quarter profits.

Source - CNN Money