UBS expected to post big fixed-income loss: report
Third-quarter loss in bank's fixed-income unit is projected to hit 600 million to 700 million Swiss francs.
(CNNMoney) -- UBS, the Swiss bank, is expected to announce Monday a third-quarter loss of 600 million to 700 million Swiss francs ($510 million to $600 million) from its fixed-income unit, according to a published report.
The fixed-income loss would be announced before UBS's overall third-quarter results, which are due October 30, according to the Wall Street Journal, citing people familiar with the situation.
The loss is based on a writedown of 3 billion to 4 billion Swiss francs for fixed-income assets, the Journal reported on its website Sunday.
Partly the fixed-income losses stem from continuing costs associated with writing off bad bets by its in-house hedge fund, Dillon Read Capital Management, in the subprime mortgage market, according to the Journal. But other securities held by the fixed-income division contibuted to the loss too, it said.
In July, UBS (Charts) reshuffled its management team - replacing then-CEO Peter Wuffli with Marcel Rohner, who was deputy CEO at the time - in the wake of the Dillon Read hedge fund blow-up, which proved costly for the investment bank.