Tuesday May 6, 09:49 AM
Swiss bank UBS to cut up to 5,500 jobs amidst financial turmoil
 |
ZURICH (AFP) - Swiss banking giant UBS (Virt-X: UBSN.VX - news) , reporting huge losses in its subprime loan debacle, said on Tuesday it would cut up to 5,500 jobs within the next year which it forecast would be tough.
The bank (NASDAQ: TBHS - news) posted a net loss of 11.535 billion Swiss francs (7.075 billion euros, 10.972 billion dollars) for the first quarter owing to its US subprime-related positions, as well as writedowns of 19 billion Swiss francs.
The results were in line with a warning the bank issued in April saying it expected a net loss of about 12 billion Swiss francs for the first three months of this year.
UBS, the biggest Swiss bank, is the bank hardest hit in the world by the subprime crisis, having made asset writedowns of 37 billion dollars. And it said on Tuesday that this year had begun with "tough business conditions" which it expected to continue.
"The impact will affect all of UBS's businesses and it requires the firm to manage costs, resources and capacity very actively," the bank said.
It said it would cut 2,600 jobs from its investment bank unit by the year-end, most through redundancies.
Staff would also be trimmed in other departments, mainly through normal departures and internal redeployment, the bank said.
Assuming no change in market conditions, it expected to have 5,500 fewer employees by the middle of 2009.
The bank also said it had "substantially reduced its risk inventory".
Positions related to US subprime mortgages had been cut by about 60 percent compared to the figures for the third quarter of last year.
Chief executive Marcel Rohner said the group's exposure was still subject to market conditions, but "we see market demand for these securities returning in certain areas and at the current level of valuations."
UBS "will get over these difficulties in the coming quarters," Rohner assured journalists on a telephone conference, although he declined to specify when exactly he expected the bank to return to profitability.
UBS has had to seek fresh capital twice, once from a Singapore sovereign wealth fund and an anonymous Middle Eastern investor and a second time from its shareholders.
UBS shares fell by 3.85 percent to 35.46 Swiss francs in early trading on the Zurich stock exchange. The overall SMI index was down 36.27 points to 7,621.99.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
