UBS, one of Europe's banks hardest hit by the market crisis, said this morning that accounting effects would drag down its fourth-quarter results.

But the Swiss group also said that it had seen some encouraging signs of client money flows in October, and that it made a net profit of SwFr296 million (£160 million) in the third quarter.

The Swiss Government rescued UBS through a SwFr6 billion capital injection and allowed it to unload $60 billion (£38 billion) of risky assets into a central bank fund last month when UBS reported most of its third-quarter results.

UBS has made more writedowns related to the US sub-prime mortgage crisis than any other European bank, adding a further $4.4 billion in the three months to bring its total written down during the crisis to almost $49 billion.

During the quarter, the bank was helped by credit and tax gains while rival European banks saw their profits evaporate and scrambled for emergency funds.

Outflows from its wealth management unit totalled a record SwFr49.3 billion francs, while its asset management business experienced net outflows of SwFr34.4 billion in the three months.

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