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Thursday 24 July 2014

Banking giant UBS announces 10,000 jobs to be cut worldwide

Published 30/10/2012|07:26

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Banking giant UBS AG has announced that 10,000 jobs are to be cut in a bid to reduce the size of its investment bank.

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Switzerland's biggest bank said it is "likely to have a headcount of around 54,000" by 2015, down from its current 64,000 employees in 57 countries.

Chief executive Sergio Ermotti announced the plans on Tuesday as part of the Zurich-based bank's third quarter results.

Mr Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be significant global player in its core businesses".

Ahead of the cuts, the value of UBS's stock rose 7.3% to close at 13.12 Swiss francs (£8.73) in Monday on the Zurich exchange.

The bank posted a net profit loss of 2.17 billion Swiss francs (£1.44 billion), compared with a profit of 1.02 billion Swiss francs (£679 million) during the same three-month period through September 2011.

In what it called "a significant acceleration" in its transformation, the Zurich-based bank said it would sharpen its focus on the investment bank and appoint a new executive to lead it.

Mr Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be a significant global player in its core businesses".

The bank attributed some of the declining profit to a pretax charge of 863 million Swiss francs (£574 million) linked to an accounting rule on how banks must value their debt.

Banks can post gains if the value of their debt falls, because it would theoretically become cheaper for the bank to repurchase that debt. But the rule also says that when a bank's debt increases, it must take a write-down because it would theoretically have to pay more to buy back its own debt on the open market.

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