UBS admitted on Monday half of the $18.7bn writedowns it suffered last year on US subprime securities had stemmed from the decision by traders in its investment banking division to hold, rather than repackage and sell, one particular category of security linked to US residential mortgages.

Contrary to most expectations, the UBS report reveals Dillon Read Capital Management, the in-house hedge fund closed in May 2007, accounted for only 16 per cent of last year’s writedowns. Most analysts had believed DRCM was the main culprit.