Fresh shudders went through the banking industry this morning after UBS revealed plans to write off a further $10 billion against its US sub-prime mortgage exposure and Societe Generale said that it had been forced to bail out its only structured investment vehicle (SIV) with a credit line of up to $4.3 billion.

The surprise hit means that UBS, Europe's biggest bank by assets and the world's largest money manager, is on course to record a loss for the full-year. Just weeks ago the Swiss bank was promising to end the full-year in the black.

Meanwhile, Societe Generale, France's second-biggest bank, will move Pace, its SIV, onto the bank's own balance sheet, in a move that gives weight to worries that sub-prime problems are yet to abate. Pierre Chedeville, an analyst at CM-CIC Seucirities said: "It shows that the crisis is not over yet, contrary to what some people thought."

Zurich-based UBS, fresh from its first quarterly loss for nine years, said this morning that it had cancelled the cash dividend and turned to two strategic investors in the Middle East and Asia-Pacific for a SFr13 billion (£5.7 billion) capital injection.

The Government of Singapore's investment arm is putting in SFr 11 billion, while an undisclosed strategic investor in the Middle East will take SFr2 billion worth of shares.

Together the two will hold a stake of up to 12 per cent in UBS, which becomes the latest bank to sell a stake to a strategic holder. Late last month, Citigroup collected a $7.5 billion investment from Abu Dhabi.

Marcel Rohner, the bank's new chief executive, said: "Conditions in the US mortgage and housing markets have continued to deteriorate, and we have updated our loss assumptions to the levels implied by the current distressed market for mortgage securities."

Mr Rohner said that continued speculation about the full extent of UBS losses had been distracting, although he admitted that the "ultimate value of our sub-prime holdings ... remains unknowable".

He added: "In our judgement these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation."

Today's $10 billion writedown is more than six times higher than the $1.6 billion forecast by analysts at Keefe, Bruyette & Woods, who described today's events as a "dramatic u-turn" from guidance given just three weeks ago.

"However, we note that, since then, peers have described a severe deterioration in credit markets at the end of November," they said.

It comes as Mr Rohner battles to steer the bank back on course. UBS has suffered a string of high-profile executive departures this year, including Peter Wuffli, the previous chief executive, and the head of the investment bank, Huw Jenkins.

It has already given warning that 1,500 jobs will go across its divisions worldwide, including the threat of redundancies in the UK, where it employs 7,250 staff.

UBS shares have fallen 21 per cent in 12 months, wiping more than SFr25 billion off the bank's market value. Today, the shares were down more than 1 per cent at SFr56.60.

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