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Swiss banking giant UBS cuts jobs after massive loss

Latest update : 2008-05-06

The bank said it would cut 2,600 jobs this year and announced a net loss of 11.5 billion Swiss francs (seven billion euros/ 10.9 billion dollars) for the first quarter due to US subprime-related positions.

Swiss banking giant UBS on Tuesday announced a net loss of 11.535 billion Swiss francs (7.075 billion euros/ 10.972 billion dollars) for the first quarter due to US subprime-related positions.
  
The bank said it would cut 2,600 jobs this year and continue the downsizing in 2009 if the tough business conditions continued, and reported writedowns of 19 billion Swiss francs for the first quarter.
  
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 said the year began with "tough business conditions" which it expects will 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 will cut 2,600 jobs from its investment bank unit by the year-end, most through redundancies.
  
Headcount will also be trimmed in other departments, mainly through natural attrition and internal redeployment, added UBS, which is also Switzerland's biggest bank.
  
Assuming no change in market conditions, it expects to have 5,500 less employees by mid-2009.
  
The bank also said it has "substantially reduced its risk inventory".
  
Positions related to US subprime mortgages have been cut by about 60 percent compared to the third quarter of last year.
  
Marcel Rohner, the bank's chief executive officer said the group's exposure is 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 has in recent months taken the largest hit from the subprime crisis, with over 37 billion dollars written down.
  
It 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.

Date created : 2008-05-06

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