July 2 (Bloomberg) -- Deutsche Bank AG and UBS AG rose in European trading for the first time in five days after the companies said they have no need to raise more capital.

Deutsche Bank, Germany's largest bank, gained 3.9 percent in Frankfurt after stating that it expects to post a profit for the second quarter. UBS Chairman Peter Kurer told Swiss newspaper Finanz & Wirtschaft that the Zurich-based bank won't need more funds after raising $29.4 billion this year.

Banks and securities firms have turned to investors for $322 billion to replenish reserves after $403 billion of writedowns and credit losses tied to the collapse of the U.S. subprime mortgage market. Speculation financial firms would need more funds helped drive an index of European banking shares down 8.8 percent in the previous four days.

``This is comforting news,'' said Konrad Becker, an analyst at Merck Finck & Co. in Munich who recommends holding Deutsche Bank shares. The German bank ``had to do something as the shares were under heavy pressure lately,'' he said.

Deutsche Bank advanced 2.04 euros to 54.48 euros in Frankfurt trading, leaving declines this year at 39 percent. UBS climbed 32 centimes, or 1.6 percent, to 20.62 Swiss francs in Zurich, valuing the bank at 60.5 billion francs ($59.6 billion). UBS has fallen 56 percent this year.

The 59-company Bloomberg Europe Banks and Financial Services Index climbed 0.6 percent, its first gain since June 25.

`Positive News'

Deutsche Bank, in a statement today, said its Tier 1 ratio, a measure of capital strength, ``will remain in the region of 9 percent and therefore the bank does not expect its financial performance in the second quarter to result in a requirement for further capital.''

The German bank, scheduled to publish second-quarter earnings on July 31, reported its first quarterly loss in five years in April after writing down the value of loans for leveraged buyouts and asset-backed securities by 2.7 billion euros ($4.3 billion). The shares dropped 4.4 percent yesterday in Frankfurt, the most in a month, on speculation the company would lower its earnings forecast.

Deutsche Bank said its core equity Tier 1 ratio was 9.2 percent at the end of the first quarter, above its target range of 8 percent to 9 percent.

``At first glance this is some much-needed positive news for Deutsche in particular but also for the whole sector,'' said Helge Rechberger, head of equity market research at Raiffeisen Zentralbank in Vienna. He said he remains ``cautious'' about the financial industry.

`Worst' Over

UBS, the European bank hardest hit by the subprime contagion, may need to mark down its assets by a further 5.1 billion francs, JPMorgan Chase & Co. analysts said in a note today. The largest Swiss bank already reported more than $38 billion of writedowns in the past three quarters, leading to the departure of top executives, including Chairman Marcel Ospel.

``The worst of the markdowns seems to be over,'' JPMorgan's Kian Abouhossein wrote in the note. ``We do not believe that further capital raising is needed at this point.''

Societe Generale SA Deputy Chief Executive Officer Philippe Collas, in an interview with Bloomberg Television today, said that the ``bulk of the work is done'' concerning writedowns at the French bank, though he couldn't rule out further markdowns.

Collas described an estimate from JPMorgan analysts that the Paris-based bank would write down an additional 1.9 billion euros as ``probably a lot too high.''

UBS is also facing a U.S. probe into whether the Swiss bank helped affluent customers evade American taxes. A Miami federal judge yesterday granted a request from prosecutors to let the Internal Revenue Service issue a summons to UBS for information about clients with secret accounts at the bank.

Kurer, in remarks made to Finanz & Wirtschaft that were confirmed by spokeswoman Sabine Woessner, said the bank takes the situation in its U.S. business ``most seriously.''

The difficulties in the U.S., as well as ``uncertainty about the quarterly earnings,'' are among factors weighing on the bank's share price, Kurer said. He declined to comment on second- quarter earnings, or on speculation that the bank may be a takeover target, the newspaper said.

To contact the reporter on this story: Oliver Suess in Munich at osuess@bloomberg.net

Last Updated: July 2, 2008 11:58 EDT