UBS posts $552-billion loss

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: UBS AG, Switzerland’s largest bank, posted a fourth straight quarterly loss as wealthy clients withdrew funds from the private bank and the company booked a charge to reflect an improvement in its debt.

UBS fell as much as 5.1% in Swiss trading after the third-quarter net loss of 564 million Swiss francs ($552 million) exceeded analysts’ estimates. The results included a 1.44 billion-franc accounting charge that reflects rising costs to UBS should it buy back outstanding debt.

Chief executive officer Oswald Gruebel, who joined in February, is trying to halt redemptions by rich clients and rebuild the investment bank after more than $50 billion of losses and asset writedowns tied to the financial crisis. He hired former Merrill Lynch & Co executive Robert J McCann last month to help stop client withdrawals at the wealth management unit. Outflows totaled 26.6 billion francs in the third quarter.

“The core private banking franchise still seems to be hurting,” said Florian Esterer, who helps manage about $49 billion at Swisscanto Asset Management in Zurich. “The money outflows are still bad across all divisions.”

UBS fell 87 centimes, or 5%, to 16.48 francs by 9:53 am in Zurich. The shares are up 11% this year, valuing the company at 58.5 billion francs. The 63-company Bloomberg Europe Banks and Financial Services Index advanced 39% this year, while Credit Suisse Group AG rose 92%.