Citi Says Rival Could Take Q4 Write-Down Of Up To $12bn

FT Alphaville reports that Citi analysts have come out and said that UBS may 'realistically' have to take a $12bn write-down in the final quarter, might also slash its dividend and faces launching a $7bn rights issue to beef up its capital base.

UBS has said that this is all nonsense, acknowledging that further write-downs might be likely, but confirming that they would be nothing like the $8bn - $12bn speculation currently doing the rounds.

Reuters reports that Bear Stearns CFO Sam Molinaro has said that he expected the firm to post a fourth-quarter loss, after taking a further $1.2bn subprime lending-related asset write-down earlier this week. Rating agency Standard & Poor's cut the firm's long-term debt rating to A from A+ after the announcement.

Bloomberg reports that Barclays came out Thursday and wrote-down $2.7bn on credit-related securities linked to US subprime lending. This was far better than the market feared (there were rumours that Barclays faced a $21bn hit).

The Times reports that HSBC announced this week that it is to take a further $3.4bn hit from lending to US trailer trash ($38m a day in the third quarter). The bank also wrote-down $925m in trading credit securities and LBO-related losses.

The Financial Times reports that Bank of Ireland has dismissed rumours that its faces massive exposure to structured investment vehicle losses. CFO John O'Donovan confirmed that 'there won't be any surprises. We're in good nick'. The newspaper also reports that Sumitomo Trust Bank has posted a 41% fall in first-half net profits, to $339m, after sustaining subprime-related losses of some $81.2m.

Some good news, however, from Credit Suisse. Reuters reports that Paul Calello, the CEO of the investment banking unit, confirmed his week that the bank's exposure to subprime mortgages and CDOs is minimal, and that the asset write-downs taken in the third-quarter still accurately reflect true market value.

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