UBS said earnings would remain at risk due to its exposure to illiquid and choppy markets, as it revised up its 2008 net loss, the biggest in Swiss corporate history, to include a large U.S. tax fine and extra writedowns.
UBS, which is struggling to rebuild its reputation after being hit hard in the crisis, said in its full-year report that its 2008 net loss had risen to 20.9 billion Swiss francs ($18.06 billion) from the previously reported 19.7 billion francs, and predicted tough times ahead.
Shares in UBS, the world's largest wealth manager, opened 3.8 percent down after the revised loss and cautious outlook.
"Even after substantial risk reduction, our balance sheet remains exposed to illiquid and volatile markets and our earnings will therefore remain at risk for some time to come," UBS said in a letter to shareholders published in its annual report.
"Our near-term outlook remains extremely cautious," UBS added.
The world's largest wealth manager agreed on February 18 to a $780 million fine to avert U.S. criminal charges that Swiss regulators say could have threatened the bank's survival, and said at the time it would book it onto its 2008 accounts.
The other additional charges relate to the Swiss National Bank's (SNB) valuation of around $7.8 billion of securities not yet transferred to an SNB stability fund, dedicated to mopping up UBS's toxic assets.
"We knew about the cross border case but we didn't know about the extra writedowns of the SNB which are a bit disappointing, although not unexpected," said Peter Thorne, a banking analyst at Helvea.
UBS said on Wednesday that net new money remained positive in its wealth management Americas division, but this was being partially offset by outflows in wealth management elsewhere, as well as in its Swiss bank and global asset management divisions.
UBS said the total impact of the U.S. fine and the asset price adjustment after tax was negative for 1.190 billion Swiss francs.
The bank said its results had been hit by worsening financial conditions and "UBS-specific factors," particularly in its investment banking division.
The Swiss bank came to the verge of bankruptcy during the credit crisis and had to be rescued by the Swiss state.
It has replaced its chief executive and chairman in the last fortnight in a bid to restore investor confidence and speed up its recovery.
