UBS to cut 2,000 jobs

Swiss lender UBS AG is cutting some 2,000 jobs in its investment bank unit over the next several years, mostly through already announced layoffs and attrition, as the bank moves to shore up its overall balance sheet.

At an investor meeting in New York, CEO Sergio Ermotti outlined management's plans to shutter some of the investment bank's operations while growing the wealth management business.

The bank is trying to recover from a $2.3 billion rogue trading loss.

UBS said it anticipates personnel at its investment bank unit will fall to 16,000 by 2016 from the current 18,000. The estimates include 1,575 layoffs the company announced in August.

Most of those cuts have already taken place and UBS expects that remaining jobs will be eliminated through attrition rather than layoffs. In an email response to a question about possible job losses in Canada, a UBS official said no regional breakout was available.

Ermotti also trimmed the bank's profit forecast. He said UBS is aiming for a return on equity of between 12 per cent and 17 per cent. Two years ago, former UBS CEO Oswald Gruebel had set a return on equity goal of 15 per cent to 20 per cent.

Gruebel resigned in September after taking responsibility for the trading loss caused by a London-based trader. Kweku Adoboli, 31, was arrested Sept. 15 and has been charged with fraud and false accounting.

The lender said it will focus now on its wealth management businesses, which manage nearly $1.5 trillion in assets, and look to grow its market share at its retail and corporate banking business in Switzerland.

Its investment banking business will work closely with the wealth management business and focus on serving clients in UBS' other divisions. The company plans to get rid of nearly 50 per cent of the risky assets in the investment banking division, which will require less capital.

Source: Canadian Business