UBS, the Swiss bank battered by the mortgage crisis, today insisted it would not need to raise more funds through a rights issue after being saved from announcing further losses by clawing in SwFr3 billion (£1.5 billion) from a tax credit.

The bank, which has already raised $16 billion through a rights issue, said the tax credit would offset further investment banking losses meaning that, at worst, it would post a small loss in the second quarter compared to analysts' expectations of a SwFr5 billion loss.

UBS said: “The results reflect positive contributions from global wealth management and business banking and from global asset management, offset by a loss in the investment bank.

“In connection with the losses to date, the second quarter results include a tax credit of approximately SwFr3 billion."

However, it said that further market deterioration led to write downs and losses on previously disclosed investment bank risk positions, in particular in its monoline insurance exposures.

Monoline insurers underwrite one type of debt, bonds, against default.

The bank also said that net new money for the period was also negative after private clients withdrew cash from the bank's wealth management arm.

It said its Tier 1 capital ratio, which is a closely watched measure of balance sheet strength, would be approximately 11.5 per cent at the end of the first quarter.

With write downs of $37 billion, UBS has been Europe’s hardest hit bank of the subprime crisis so far.

UBS will release its second-quarter results as planned on August 12, the bank said.

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