Just three weeks ago, UBS's finance director, Marco Suter, was guiding analysts to expect the Swiss financial services giant to return to profit in the fourth quarter.

Fresh writedowns related to five months of credit market turmoil should be limited, he said, suggesting the worst for the continent's investment banks was over.

So today's $10 billion writedown — on top of a $3.7 billion hit in the third quarter — came as something of a surprise.

The cash dividend is put on hold and as much as 12 per cent of the proud Swiss group is sold to the investment arm of the Government of Singapore and an unnamed Middle Eastern investor for a total of $11.5 billion.

UBS joins Citigroup and Barclays in offloading substantial stakes to strategic investors for a slug of useful capital.

It also comfortably tops them with the highest credit-related writedowns of any international banking group so far.

Clearly, Marcel Rohner, the new chief executive, is taking the opportunity to clear the decks at UBS while he has the chance.

Given the amount of febrile gossiping about fresh bouts of credit pain for the investment banks, he is also trying to draw a line in the sand for investors.

It might be this that helped prompt a 3 per cent increase in the shares this morning, despite the size of writedowns and the temporary converstion of a cash dividend payout into stock.

But the market has turned yet again since Mr Suter delivered his initially confident predictions.

Bankers have talked of a fresh and severe downturn in sentiment in credit markets, compounded by a financial year-end that has seen banks even less willing to lend to each other.

Today's UBS gloom may mark the beginning of the end of credit-related losses for the Swiss group. But it does little to deter those who suggest a fresh round of writedowns for its peers in Europe and the US are on the cards.

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