(LONDON) Swiss bank UBS closed proprietary credit trading desks in London and Asia last week but kept a Connecticut desk open, sources said yesterday.

The group affected by the cuts is called the Global Credit Strategies Team with around 10 jobs cut in London after trading losses of 100 million euros (S$212 million), the sources said. UBS declined to comment.

The Swiss bank announced its first quarterly loss in five years last month after taking charges of 4.4 billion Swiss francs (S$5.67 billion) on exposures linked to US sub-prime mortgages.

The bank said recently it aimed to cut exposure to proprietary trading and that it wanted to cuts jobs by around 1,500 in investment banking.

The bank’s analysts in New York said losses to banks and investors from the sub-prime mortgage crisis could rise to US$480 billion in coming years, analysts at UBS AG said in a research note published late on Tuesday.

The possible hit between US$380 billion and US$480 billion is based on a ‘reasonable’ loss rate assumption of 44 per cent as home prices decline, the New York-based analysts, led by Laurie Goodman, said in a research note on Wednesday. Some US$85 billion of the losses may come from collateralised debt obligations, or CDOs, they said.

Forced liquidations of sub-prime assets will create market prices and give investors confidence that a bottom has been set, analysts said without predicting when those sales will occur. — Reuters

Source: Business Times