UBS said a new capital injection would strengthen its position amid the subprime crisis as it called on shareholders to support its emergency capital hike.
UBS made the appeal in letter to shareholders released today.
The Swiss bank is braced for what looks set to be a stormy shareholder meeting on February 27th when it will seek approval for a capital increase, resulting in the sale of a 9 per cent stake to the Singapore government and around 1.5 per cent to a Middle East investor.
UBS said it had decided against undertaking a rights issue to raise capital on the grounds of cost, complication and time.
"During 2008, the environment for financial markets, especially in the US, is uncertain, and we need to manage through this period from a position of financial strength," the bank said in a letter to shareholders, dated January 10th.
Shares in the bank were indicated to open some 0.4 per cent higher.
UBS has been one of the biggest casualties of the collapse in the US subprime mortgage market, which resulted in billions of dollars in writedowns by banks in the value of their securities portfolios.
In December, UBS announced a new $10 billion writedown on its subprime-related exposures, which came on top of an earlier charge of $4.4 billion on UBS's risky subprime exposures.
The bank's letter comes after the New York Timesreported Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments.