March 17 (Bloomberg) -- UBS AG, Europe's biggest bank by assets, fell the most in more than nine years in Swiss trading after reports that the company may cut as many as 8,000 jobs, sell a U.S. unit and raise more capital.

UBS fell 3.94 Swiss francs, or 14 percent, to 24.5 francs. That marked the biggest decline since September 1998 and the lowest level since October that year, three months after UBS was created in a merger. Credit-default swaps on the Zurich-based bank jumped 25 basis points to 235, according to Deutsche Bank AG.

UBS plans to cut 5 percent to 10 percent of jobs across its different units and may also propose a capital increase at its shareholders meeting in April, according to a report in SonntagsZeitung, which cited unidentified managers present at the company's top executives' meeting in Berlin last week. UBS on March 14 denied a CNBC report that it may seek to sell its Paine Webber U.S. brokerage unit to raise money.

``If the bank were contemplating a disposal this suggests a new level of desperation for UBS at raising capital,'' Peter Thorne, a London-based analyst at Helvea, said in a note. ``Coming at the same time as the collapse of Bear Stearns and concerns about the financial system in general, and banks with suspect balance sheets in particular, we expect continued pressure on the UBS share price.''

The Paine Webber division ``is not up for sale,'' UBS spokesman Mark Arena said March 14. Axel Langer, a spokesman for UBS, said yesterday that the Berlin meeting occurred and that job cuts may take place, though there are ``no concrete plans'' to eliminate positions. He declined to comment on whether a capital increase was discussed in Berlin or is under discussion.

Bear Stearns

UBS dropped 65 percent over the past 12 months, cutting the company's market value to 50.8 billion francs ($51.5 billion), the first time since August 2000 that it is worth less than its domestic rival Credit Suisse Group, which is valued at 52.5 billion francs.

Bear Stearns Cos. had to sell itself to JPMorgan Chase & Co. for $240 million, about 90 percent less than its value last week, after clients, alarmed by speculation about a cash shortage, withdrew $17 billion in two days.

Tobias Lux, a spokesman for the Swiss Federal Banking Commission, said the regulator is monitoring the liquidity situation at Swiss banks. ``The stable liquidity situation of the two big banks hasn't changed,'' he said, referring to UBS and Credit Suisse.

UBS raised 13 billion francs from investors in Singapore and the Middle East to shore up capital eroded by $19 billion in writedowns on debt assets and loans last year. The bank may mark down assets by 15 billion francs in the first quarter, ``wiping out 2008 profits,'' analysts at Keefe, Bruyette & Woods Ltd. wrote in a note to clients March 11.

To contact the reporter on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net

Last Updated: March 17, 2008 14:09 EDT