UBS reports Tuesday: brace yourself

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Let’s hope the UBS earnings report is not as bad as Merrill. If you recall, Citi, Merrills and UBS are the three worst offenders when it comes to writedowns. Given the recent asset sales by RBS and Merrill, one would expect to see some real ugliness at UBS tomorrow. Stay tuned.

The pressure is growing to make some radical moves, after a series of challenges:

  • The bank’s writedowns on bad credit investments are expected to reach $43 billion.
  • A settlement was announced Friday with U.S. regulators to buy back as much as $19 billion in auction-rate securities.
  • The bank’s private-banking business is fighting to keep lucrative clients amid a tax-evasion investigation.

Among the options being aired: the sale of a UBS money-management unit in the U.S., formerly known as PaineWebber, and the separation of its troubled investment bank into an independent unit.

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WSJ, 11 Aug 2008

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