July 3 (Bloomberg) -- Anshu Jain, head of global markets at Deutsche Bank AG, said the contagion triggered by the U.S. subprime mortgage collapse has erased more than a fifth of the banking industry's value and is ``by no means over.''

Jain, at a Euromoney conference in London, said the crisis ``has wiped out $200 billion,'' or about 22 percent of U.S. banks' so-called tangible equity. That impact is similar to the combined effect on the insurance industry of Hurricane Andrew, the Sept. 11 attacks and Hurricane Katrina, he said.

``This banks crisis is really at a point where it equals the three biggest crises faced by the insurance industry,'' said Jain, 45. ``It's by no means over.''

Banks and securities firms have reported more than $400 billion of writedowns and credit losses and raised about $322 billion to replenish reserves since the start of last year, data compiled by Bloomberg show. Frankfurt-based Deutsche Bank said yesterday it expects to report a profit for the second quarter and currently has no need to raise further funds.

Deutsche Bank's Tier 1 capital, a measure of financial strength, will remain at about 9 percent, the company said yesterday. Tangible equity refers to common equity, such as share capital and retained earnings, minus intangible assets.

The German bank rose 1.33 euros, or 2.4 percent, to 55.81 euros in Frankfurt trading, a second straight gain. The shares have declined 38 percent this year.

UBS Capital

UBS AG, the largest Swiss bank, may post $6.9 billion of writedowns and seek to raise more capital, Citigroup Inc. analysts said, a day after Chairman Peter Kurer told a newspaper the largest Swiss bank won't need more funds.

The Zurich-based company, which wrote down $38 billion over the past three quarters, still carries $83 billion of ``risk exposures that are likely to require further markdowns,'' London- based Citigroup analyst Jeremy Sigee said in a note today. UBS has already raised $29.5 billion this year.

Jain declined to predict when the crisis will end. He described the U.S. Federal Reserve's decision to provide a ``liquidity backstop'' for securities firms as a critical step. The main difficulty banks are currently grappling with has to do with solvency rather than ready access to cash, he said.

House Price `Free Fall'

``Banks continue to need and raise equity capital, and the proportion of equity capital which is required is directly driven by the further drop in assets they own,'' Jain said. ``One of the assets which continues to be in free fall is U.S. house prices.''

If U.S. home prices were to stop dropping for two to three consecutive months, ``then very quickly we will start to find the bottom'' to the current crisis, Jain said.

The U.S. housing slowdown started in mid-2005 when sales of new and existing homes began to fall, bringing a five-year boom to a close. Prices for existing homes started falling last July and finished the year below 2006 levels, the first annual decline since the Great Depression, according to the National Association of Realtors in Chicago.

Jain, who was born in Jaipur in India's Rajasthan state and was formerly a fixed-income derivatives salesman, helped transform Deutsche Bank into a bond market powerhouse. He was put in charge of combining debt and equity sales and trading in 2004.

Jain predicted growth in Asian economies and capital markets will outpace the U.S. in coming years, and said Asia's capital markets expanded 25 percent in the past three years compared to 9 percent growth in the U.S.

Deutsche Bank reported its first quarterly loss in five years in April after writing down loans for leveraged buyouts and asset-backed securities by 2.7 billion euros ($4.2 billion).

Fitch Ratings and Standard & Poor's today reaffirmed Deutsche Bank's credit ratings, with Fitch noting a stable outlook. The reports followed Deutsche Bank's statement yesterday that it agreed to buy commercial lending units in the Netherlands from Fortis for 709 million euros.

``The terms of the agreement should outweigh potential integration risks and counterbalance investment costs,'' S&P said in a statement.

To contact the reporter on this story: Frank Connelly at fconnelly@bloomberg.netJoyce Moullakis in London at jmoullakis@bloomberg.net

Last Updated: July 3, 2008 12:46 EDT