The red ink at UBS today does not augur well for Europe's other investment banks.

Credit Suisse said in a separate update that it was still calculating its third quarter numbers but its investment bank and asset management businesses had been "adversely impacted" by the credit market turmoil.

The Swiss bank, one of UBS's main rivals, gave little else away, although it insisted that as a group it had still been profitable in the third quarter.

Deutsche Bank has already cautioned that it will "inevitably" be hit by sub-prime and leveraged loan problems, particularly as a result of the market seizing up in August and liquidity all but evaporating.

Deutsche has €32 billion of exposure to asset-backed commercial paper programmes and a total pipeline of leveraged loans of €29 billion.

Its shares have taken a hammering in recent weeks on speculation it was preparing to take a writedown on its loan portfolio of as much as €1.7 billion.

But then, UBS shareholders appear to have been fairly sanguine about today's Sfr4 billion ($3.4bn) writedown and quarterly loss of as much as Sfr800 million.

This, of course, before Citi warned that profits in the third quarter would dive by as much as 60 per cent.

Having initially fallen by just over 1.5 per cent, UBS recovered some of its losses after analysts said the situation could have been much worse.

But UBS shares have fallen 15 per cent since the beginning of the year as investors continued to fret about performance at the group.

Some of the bank's troubles have clearly been of its own making. Today, it acknowledged that its risk management techniques had failed to spot trouble coming.

This follows the closure of its hedge fund, Dillon Read, earlier this year, amid further losses that helped spur the departure of Peter Wuffli, the bank's previous chief executive.

For now, investors will be relieved that other parts of the group appear to be performing well.

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