The bank said it expected to return to profitability in the fourth quarter, but the investment banking division would continue to make losses. It added: "The FICC business remains exposed to further deterioration in the US housing and mortgage markets as well as rating downgrades for mortgage-related securities, which could lead to further writedowns on the positions. As a result, UBS is not assuming that the quarter will continue as positively as it has begun, or that the current difficulties will be resolved in the short term."
See also:BoA starts retreat from investment banking
Merrill Lynch reports $5.6 billion losses on FICC business
Credit crisis hits Citigroup harder than expected
Credit Suisse and Citi expect profit losses for Q3