• Switzerland edition

UBS to slash 10,000 jobs

Published: 30 Oct 2012 09:17 GMT+01:00 | Print version
Updated: 30 Oct 2012 09:17 GMT+01:00

Swiss banking giant UBS intends to cut nearly 10,000 jobs worldwide in a restructuring of its hard-hit investment bank, the group said on Tuesday, reporting that reorganization costs had pushed it deep into loss in the third quarter.

The costs switched the Swiss bank's third-quarter results into a 2.2-billion franc ($2.36-billion) net loss compared to the 1 billion net profit it had reported during the July-September period last year.

"This decision has been a difficult one, particularly in a business such as ours that is all about its people," UBS chief executive Sergio Ermotti said in a statement, referring to the job cuts.

"Some reductions will result from natural attrition and we will take whatever measures we can to mitigate the overall effect," he said, vowing that "our people will be supported and treated with care."

The Zurich-based bank said that cuts in its overall staff numbers to about 54,000 by 2015 was a necessary part of a restructuring of its investment bank, including shedding some of its high-risk activities and basically withdrawing from the fixed income business which had burdened it with catastrophic losses during the 2008 "subprime" crisis.

UBS, which counted nearly 64,000 employees at the end of September, said the restructuring would save 5.4 billion francs ($5.8 billion) over the next three years.

UBS said in its earning statement it had taken a one-time charge of 3.1 billion francs linked to the restructuring and a debt-related charge of 863 million.

Before taxes, UBS said it was hit by a loss of 2.5 billion francs, but that adjusted for the impairment losses and a restructuring provision, it had registered a pre-tax profit of 1.4 billion.

Ermotti hailed the company's earnings, stressing that all the bank's activities had "delivered improved profitability in the third quarter," and that it was rolling out its strategy "well ahead of schedule."

"We are confident that the actions we are taking now will ensure the firm's long-term success in the fundamentally changed regulatory and economic environment and will deliver sustainable returns for our shareholders going forward," Ermotti said in a joint comment with UBS chairman Axel Weber.

The bank said it was withdrawing from lines of business "that do not meet their cost of capital sustainably or are in areas with high operational complexity or long tail risks likely to weigh on future returns."

UBS finance chief Tom Naratil told a conference call on Tuesday that the bank had "delivered a solid performance despite a challenging environment."

The bank expected to have to pay a further amount of about 500 million Swiss francs in restructuring charges in the fourth quarter, which is also expected to be in the red.

But Naratil stressed that despite the difficult economic environment, the bank had managed to raise a "record" amount of fresh capital, raising 7.7 billion francs from the Asia Pacific region, emerging markets and very wealthy clients.

In the fourth quarter, the bank said it expected to pull in more fresh capital despite the continued difficult climate.

As for dividend payments, which UBS started doing again last year after a four-year freeze, Naratil said "we continue to accrue for a dividend" in 2012, but did not specify if the bank would hand out some of its profits this year to shareholders.

Your comments about this article:

The comments below have not been moderated in advance and are not produced by The Local unless clearly stated. Readers are responsible for the content of their own comments. Comments that breach our terms and conditions will be removed.

ADD YOUR COMMENT   (YOU MUST LOG IN OR REGISTER TO MAKE A COMMENT)
Today's headlines
China premier slams EU on solar tax
Photo: Fabrice Coffrini/AFP

China premier slams EU on solar tax

China's Premier Li Keqiang has slammed the European Union for plans to probe the country's telecom products and impose taxes on its solar panels, Chinese state media reported on Saturday. READ () »

Tibetan exiles berate Chinese rights record
Photo: Fabrice Coffrini/AFP

Tibetan exiles berate Chinese rights record

Tibetan exiles in Bern on Friday urged Swiss authorities to take China to task for its human rights record during a landmark visit by Premier Li Keqiang focused squarely on a trade deal. READ () »

Chinese premier lauds trade deal in Bern
Swiss parliament building in Bern. Photo: OFCL

Chinese premier lauds trade deal in Bern

Chinese Premier Li Keqiang on Friday hailed a free trade deal with Switzerland as a landmark achievement, saying it had "huge meaning" for global trade and underscored Beijing's growing openness to the world. READ () »

Appenzell Innerhoden enjoys 'pure democracy'
Appenzell Innerhoden's 'direct democracy' is practised outdoors. Photo: Sebastien Bozon/AFP

Appenzell Innerhoden enjoys 'pure democracy'

Steffan Millius grips his sword and makes his way through the throngs of people crowding into Appenzell's central square to take part in Switzerland's famous direct democracy in perhaps its purest form. READ () »

University professor faces false CV charges
Professor Sam Blili. Photo: University of Neuchâtel

University professor faces false CV charges

A University of Neuchâtel professor under fire for alleged plagiarism is now facing accusations of falsifying his CV. READ () »

French court seizes Swiss explorer’s sailboat
Mike Horn aluminum ketch, Pangaea. Photo: MikeHorn.com

French court seizes Swiss explorer’s sailboat

The sailboat of Swiss explorer and adventurer Mike Horn was ordered seized by a Marseille court in a southern French port over a dispute involving a naval architect, according to a media report. READ () »

Geneva police raid sex parlours over 'tax fraud'
Photo: Joshua Rindner

Geneva police raid sex parlours over 'tax fraud'

Geneva cantonal police raided eight erotic massage parlours on Tuesday for an investigation into tax fraud allegedly amounting to several million francs. READ () »

Swiss diamond necklace 'stolen' at Cannes
Socialite Paris Hilton modelling De Grisogono jewellery in Antibes, near Cannes, this week. Photo: AFP

Swiss diamond necklace 'stolen' at Cannes

A diamond necklace from Geneva jeweller De Grisogono worth 2.5 million francs was reported stolen from Cannes on Thursday, just days after thieves made off with 1.4 million francs' worth of bling from Chopard, another jeweller from the Swiss city. READ () »

Chinese premier touts trade deal with Swiss
Chinese Premier Li Keqiang. Photo: AFP

Chinese premier touts trade deal with Swiss

Chinese Premier Li Keqiang sees a looming free-trade deal with Switzerland as a touchstone for Beijing's growing ties with foreign nations, he told a Swiss newspaper on Thursday ahead of a landmark visit to Europe. READ () »

Sponsored Article
Top ten reasons to be amazed by Amsterdam

Top ten reasons to be amazed by Amsterdam

Whether you have ever or never visited the Netherlands, the country that crowned a new monarch this year is also celebrating a wealth of special jubilees in its popular capital. Here’s the lowdown on why Amsterdam is the place to be in 2013. READ () »

Highlights
Furniture Leasing Corporation
Henrik Trygg/imagebank.swede.se
Latest news from The Local in Sweden

More news from Sweden at thelocal.se

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Norway

More news from Norway at thelocal.no