UPDATE: UBS Eyes Job Cuts,Doesn’t Rule Out Unit Split -Report
Last Update: 3/16/2008 11:02:49 AM
(Adds UBS comment.)
ZURICH (Dow Jones)–UBS AG (UBS) is considering cutting as many as 8,000 jobs to
save costs, and won’t rule out a possible split of its wealth management and
investment banking business, a Swiss newspaper reported Sunday.
Chief Executive Marcel Rohner reaffirmed at a recent meeting of 300 senior UBS
bankers that the Swiss bank wants to keep its wealth management and investment
banking operations under one roof, but he also said alternative scenarios always
have to be considered, Swiss weekly Sonntagszeitung reported.
The newspaper didn’t name its sources.
UBS confirmed that the meeting had taken place, but denied that concrete
headcount figures were mentioned, or that a separation of the investment banking
and wealth management businesses had been discussed.
It is true that UBS aims to improve its cost-to-income ratio and is taking
measures to boost efficiency, spokesman Axel Langer said. Such measures can
include job cuts, but there aren’t any concrete headcount reduction targets, he
added.
UBS is one of the worst-hit banks worldwide by the financial markets crisis that
started with the demise of the market for risky home loans in the U.S. The Swiss
bank has written down more than $18 billion on such assets last year, and
analysts expect more to come.
The write-down caused a loss at UBS’ investment bank, which more than offset
strong income from the business of managing the assets of rich clients resulting
in the bank’s first-ever full-year net loss. Rohner also told bankers attending
the meeting, which was held in Berlin, that UBS is holding around 30 billion
Swiss francs ($29.2 billion) worth of municipal bonds. These are highly rated
assets, but the market for them has almost dried up in recent weeks.
Langer said that the balance sheet hadn’t been discussed at the meeting, and that
it is therefore unclear where this number - the bank’s alleged municipal bonds
exposure - comes from.
Company Web Site: http://www.ubs.com
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