UBS Shopped PaineWebber Unit In Bid to Raise Cash

Charlie Gasparino,|On-Air Editor

Swiss bank UBS, another bank suffering from the credit crunch, recently shopped its PaineWebber brokerage unit in an effort to drum up cash but failed to find the right buyer, CNBC has learned.

Oliver P. Quillia for

The deal talks occurred during the fourth quarter of last year, where they shopped to a handlful of potential buyers including Barclays Bank , Bank of America and Wells Fargo.

Because of worsening credit crisis affecting Wall Street firms, UBS may resume trying to find a buyer for PaineWebber, one of the largest brokerage firms in the US with 8,248 financial advisors/brokers.

In a statement, UBS told CNBC that it’s not currently trying to sell PaineWebber but declined to comment on past efforts or a possible resumption.

Last week, UBS came under renewed pressure due to speculation it had sold a huge portfolio of risky mortgages at a deep discount and that the scale of its subprime losses was rapidly mounting, Reuters reported.

UBS Shopped Brokerage Unit

Analysts said they believed UBS had sold its Alt-A investments -- U.S. mortgages ranked between prime and subprime -- to bond manager Pimco for 70 cents to the dollar, taking a deep discount on a 26.6 billion Swiss franc ($25.7 billion) portfolio.

Analysts also said they expected the ailing bank making further writedowns on a massive 400 billion franc portfolio of repurchase agreements as it rushes to cut its exposure to the capital markets in general and to risky assets in particular.

UBS, the European bank hit hardest by the credit crisis, has said it is well positioned to withstand further losses after raising 19 billion francs in emergency capital. Analysts largely agree that the bank could take more big hits without needing more emergency cash from shareholders or new investors.

--Reuters contributed to this article.