The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (

Trefis

) -- Shares of

UBS

(UBS) - Get Report

have been languishing below $13 for more than three months now, having lost more than a third of their value from their $20 high in April.

Some factors are behind this decline, the most prominent being the deteriorating debt situation in Europe.

Additionally the directive from Swiss regulators to the largest Swiss bank and competitor

Credit Suisse

(CS) - Get Report

to tighten its capital structure, new tax agreements signed between Switzerland and countries like the U.K and Germany, and concerns regarding the bank's internal control policies -- which failed to detect unauthorized trades that cost the bank $2.3 billion -- also contributed to the free-fall in the bank's share price over this period.

However we believe that the current market price hardly does justice to the value of the bank, which has established itself as one of the best wealth management institutions in the world.

We recently revisited our forecasts for the bank and revised

our price estimate for the stock from $20 to just under $16 and detail below the reasons for this 20% reduction in our estimate.

See our complete analysis of UBS

here.

UBS's wealth management division is the Swiss bank's most valuable business, contributing to just under 60% of its value according to our estimates.

The global slowdown has hit the wealth management business, with total assets under management (AuM) on the decline in recent quarters. With this trend likely to continue in the near-term, our previous estimate of 6% annual growth in AuM has been revised downward.

To add to that, the increasing number of tax-treaties between Switzerland and various nations that view it as a tax haven will also hit the bank's operations, and will likely contribute to the slower growth in assets.

UBS is expected to scale down its sales and trading operations considerably over the next year to satisfy Swiss regulatory requirements agreed upon earlier this year.

The bank is currently selling off assets to meet stringent capital requirements, resulting in a decline in total trading assets. Losses related to sovereign debt in its trading portfolio have also trimmed the bank's trading assets. However we believe that those moves are largely one time in nature and that trading assets will resume growth soon, albeit at a slower rate than what we had earlier predicted.

With the outlook for the global economy also revised downwards, we have also reduced figures for the yield expected from the bank's sales and trading operations.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.