UBS today warned its investment bank will make a loss this year, after hefty writedowns dragged the division to a Sfr3.7bn (€2.2bn) third-quarter loss before tax and into the red at the nine-month stage, with no recovery in sight in the final quarter.

The bleak outlook on the investment banking front came as UBS opened the third-quarter reporting season for Europe's biggest banks, with rivals Deutsche Bank and Credit Suisse also set to report figures this week. Analysts and investors are watching closely to see how badly losses linked to the US sub-prime problems and wider credit crisis have impacted European banks, after their US peers reported weak results.