Business | Banking
UBS to slash 2,000 jobs after record loss
UBS posted the biggest ever annual loss for a Swiss firm on Tuesday, but said client withdrawals reversed in January and it will axe 2,000 more jobs as it restructures to focus on wealth management.
- Reuters
- Published: 23:04 February 10, 2009
Zurich: UBS posted the biggest ever annual loss for a Swiss firm on Tuesday, but said client withdrawals reversed in January and it will axe 2,000 more jobs as it restructures to focus on wealth management.
UBS reported an 8.1 billion Swiss francs (Dh25.6 billion) net loss in the fourth quarter, missing a Reuters poll forecast for 7.1 billion Swiss francs. UBS' loss for 2008 came in at 19.7 billion Swiss francs, above analysts' predictions for 18.7 billion francs.
The quarterly loss came on the back of a hefty 8.8 billion Swiss franc trading loss, as well as charges it made after selling billions in toxic assets to the Swiss National Bank when it was rescued by the state in October.
Chief Executive Officer Marcel Rohner told journalists that the world's biggest wealth manager was not paying a 2008 dividend but still aims to return to profit in 2009 after seeing some positive signs at the start of the year.
"While we leave a bad year behind us... we can nevertheless report substantial progress," Rohner said.
"Our businesses are well positioned for a challenging future. We had an encouraging start into the new year but the environment will remain difficult and volatile as the real economy has not seen [the] worst yet."
UBS continued to suffer massive outflows in the fourth quarter at its core wealth management business. But the Swiss bank said net new money had turned positive in both wealth management and asset management in January, the first time after a streak of negative quarters. It did not give details.
"In its outlook statement UBS indicates a strong start into 2009 and a reversal of the money flows. We remain sceptical as the clean-up of the mess will take several quarters," Dirk Becker, Kepler Capital Markets analyst, said in a note.
UBS stock swung sharply in early trade, rising as much as 7 per cent before dipping 2 per cent to trade at 12.64 Swiss francs by 0910 GMT, broadly in line with a 2.3 per cent weaker DJ Stoxx European banking index.
Vontobel analyst Marcel Staub said investors would continue to shun the stock as long as uncertainties remained: "We will have to wait and see if management's [overly] optimistic statement regarding the beginning of the year will be enough. Its comments three months ago were similarly positive."
UBS also announced structural changes to refocus the bank on its core Swiss businesses, its global wealth management operation and on the growth potential of its onshore business.
It is creating two new business divisions: Wealth Management & Swiss Bank under the leadership of Franco Morra and Juerg Zeltner, and Wealth Management Americas, led by Marten Hoekstra.
All three are members of the board.
UBS said it was continuing to cut the size of its troubled investment bank, saying it aimed to bring its total staff to about 15,000 from 17,171 now.
Rohner, who said the fourth quarter had seen the "worst environment ever for investment banking", said the bank's total staff should fall to around 75,000 by mid-2009 from 77,000 now.
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