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Swiss bank UBS has reported a greater-than-expected pre-tax loss, with the company the latest casualty of the ongoing global credit crunch.

The bank confirmed in a statement today that it had made a pre-tax loss of 726 million Swiss francs (£304 million) in the third-quarter - the first loss reported by UBS in almost five years.

Although the operating loss was within the range of 600 to 800 million Swiss francs forecast by UBS on October 1st, the bank warned that it could face further problems.

UBS said the deterioration of its performance during the three months to the end of September was "mainly due to the substantial losses and writedowns in trading positions related to the US sub-prime residential mortgage-backed securities market".

The bank took charges of 4.2 billion Swiss francs on sub-prime related losses in its fixed income investments during the third quarter.

Confirmation of UBS' losses comes after rival investment bank Merrill Lynch revealed last week that the global credit crunch, prompted by rising default levels in the sub-prime sector, had affected its operations to a greater extent than it had previously anticipated.

Deutsche Bank and Credit Suisse are also expected to reveal how the credit squeeze affected their third quarter performances later this week.

UBS said with part of its business continuing to be exposed to a potential further deterioration in the US housing and mortgage markets, additional losses were a possibility.

As such the group does not expect its investment banking arm to return a profit during the last three months of the year, but stressed the business as a whole should return to profitability in the fourth quarter.

Commenting, UBS chief executive Marcel Rohner said: "Our third quarter result was unquestionably disappointing.

"However we have introduced a number of measures to improve performance. With the new management team, we are implementing changes to address the weaknesses that led to the losses."