UBS to report large loss from fixed-income unit By MarketWatch Last Update: 4:53 PM ET Sep 30, 2007Print E-mail Subscribe to RSS Disable Live Quotes SAN FRANCISCO (MarketWatch) -- UBS AG is expected to report on Monday a large loss from its fixed-income unit for the third quarter, according to a published report. A story in the online edition of the Wall Street Journal citing people familiar with the matter reported UBS is forecasting a third-quarter loss of swiss francs 600 million to swiss francs 700 million ($602 million) based on a writedown of swiss francs 3 billion to swiss francs 4 billion for fixed income assets. The bank is reporting the fixed-income loss ahead of its third-quarter results which are due Oct. 30. The bank in August told investors that the third quarter would be difficult if credit markets continued to struggle, the report notes. Read the full story at WSJ.com (Subscription). According to the Jounral, sources said the losses resulted from applying sharply lower market values to asset-backed bonds, after the Swiss bank took a conservative view of where these securities will be trading for the near term. Officials for UBS could not be reached late Sunday for comment on the report. In August, UBS reported a 79% jump in second-quarter profit on record fee income and the sale of its stake in Julius Baer, though it warned over "very weak trading." The world's largest wealth manager said at the time that the downturn in credit and equity markets continued into the third quarter and added it would likely report a drop in second-half profit if turbulent market conditions continue. In May, UBS closed its hedge fund unit, Dillon Read Capital Management, after it suffered losses from trading in the U.S. subprime mortgage market.
Not too suprising, since they always wrote such bullish "research " about the various fixed-income market.