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UBS to cut 5,500 jobs, posts Q1 loss

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Date: Tuesday 06 May 2008

LONDON (ShareCast) - Swiss banking giant UBS said it will cut up to 5,500 jobs by mid-2009 as it revealed net losses of 11.54bn Swiss francs in the first quarter.

The Zurich-based group also plans to sell $15bn in mortgage assets to a newly created fund managed by BlackRock. The assets have a nominal value of around $22bn.

The first quarter loss compares with a net profit of 3bn Swiss francs in the same period last year. Last month, the bank announced that it expects a first quarter net loss of about 12bn Swiss francs due to fresh write-downs of $19bn.

UBS will cut 2,600 jobs in its investment banking division by the end of the year. The remainder will go by mid-2009 through redundancy, natural attrition and internal redeployment.

Chief Executive Officer Marcel Rohner said he expects tough business conditions to continue, but added that the bank would return to profitability.

“The year started with tough business conditions for the financial industry as a whole,” said the group.

“UBS expects this difficult environment to remain and be characterized by a continuing unfavorable global economic climate, deleveraging by institutional and private investors, slower wealth creation and lower trading and capital market activity,” it added.