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Last Updated: Friday, 11 January 2008, 14:25 GMT
Sub-prime woes continue for UBS
Sign outside UBS offices in New York
UBS has been hit hard from the US mortgage meltdown
Swiss investment bank UBS has warned that it does not know what the final financial impact of the US sub-prime mortgage crisis may be.

UBS has written off about $14bn (7bn) in debts linked to sub-prime loans.

The bank wants shareholder support to sell a 9% stake to the Singapore government, and 1.5% to another buyer.

Its comments come as a report says that US investment firm Merrill Lynch is facing higher sub-prime related losses than previously estimated.

A report in the New York Times newspaper says the US investment firm faces losses of $15bn through its exposure to sub-prime mortgage investments.

The paper says Merrill Lynch, which reports its results next week, is seeking capital from an outside investor.

'Uncertain'

UBS has said it is cheaper for it to raise money through selling stakes in the firm to investors, rather than through a rights issue.

"During 2008, the environment for financial markets, especially in the US, is uncertain, and we need to manage through this period from a position of financial strength," the bank said in a letter to shareholders.

"We cannot, at this time, accurately predict the future development of US residential mortgage markets and therefore the ultimate impact on our positions in sub-prime mortgage related securities," the letter added.

Switzerland's Federal Banking Commission is set to investigate how UBS became one of the banking sector's worst victims of the credit crunch.

UBS has already said that it might report an overall loss for 2007.

A string of global banks have indicated how much they have lost as a result of exposure to investment products linked to US sub-prime mortgages, which were lent to people with patchy credit histories.



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