UBS Set to cut 5,500 Jobs after Q1 Loss

Source: Exec US

Date :06/05/2008 09:47:13

Battered by $17.3 billion first-quarter losses at its investment-banking unit, UBS, the largest Swiss bank, plans to cut about 5,500 jobs.

The cuts include 2,600 in its investment-banking unit, as the Swiss bank announced clients withdrew a net $12.2 billion from its asset- and wealth-management divisions.

The investment banking job cuts, which come on top of the 1,500 positions abolished since October, will fall most heavily on businesses in the U.S and Britain, the chief executive, Marcel Rohner said.

The bank also said it was planning to sell $15 billion of distressed mortgage assets to the asset management company BlackRock and that it would close its institutional municipal bond business in the U.S.

Hard hit

UBS has been the hardest hit of all European financial institutions in the credit crisis that began last year and reported a first-quarter loss of 11.5 billion Swiss francs. That was in line with its estimates, but it represented a sharp turn from a net profit of 3 billion francs in the first quarter a year ago.

UBS wrote down $19 billion in soured subprime mortgage securities and other investments in the first quarter, bringing its total write-downs since the beginning of the credit crisis to about $38 billion.

Banks globally have written down more than $300 billion since the start of the crisis.

May 6, 2008