UBS Drops After Warning Of More Mortgage Losses

New York, NY (AHN) - UBS AG declined in Swiss trading on Monday after the firm indicated that it faces more losses from mortgage securities.

The Swiss firm is reportedly in need of $15.6 billion to improve its balance sheet after making losses on non-U.S. residential and commercial real-estate securities last year and the first quarter in 2008.

"UBS will have to fight against negative news flow for at least several more quarters," Rolf Biland, who helps manage about $3.1 billion, including UBS shares, as chief investment officer at VZ Vermoegenszentrum in Zurich, told Bloomberg.

"The U.K. housing market is almost as overheated as in the U.S., and could lead to losses for banks," Biland added.

UBS said, in a 925-page document, it was hurt by the economic and market conditions as they were volatile and challenging into the second quarter.

Last week, UBS indicated that it would sell $22 billion worth subprime and Alt-A U.S. residential-mortgage-backed securities to BlackRock for $15 billion.

So far, the bank has reported $38 billion in writedowns related to the U.S. subprime crisis.

While, the firm has investments of around $45 billion in U.S. mortgage-related assets, $8.6 billion in leveraged finance commitments and $10.4 billion in U.S. student loans in its balance sheet, according to Bloomberg.

Shares of the Switzerland-based banking giant UBS, which has already lowered by more than 60 percent over the last one year, was trading down recently by 5.8 percent in Zurich.