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UBS posts record €13bn loss, trims more jobs

Switzerland's largest bank has announced a record €13 billion loss for 2008, its second consecutive full-year loss. UBS also said it would cut another 2,000 jobs at its loss-making investment banking unit.

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AFP - Switzerland's biggest bank UBS on Tuesday said it lost about 17 billion dollars (13 billion euros) in 2008, the largest full-year loss in Swiss corporate history, as it announced that it would cut another 2,000 jobs.

Full year loss in 2008 reached 19.697 billion Swiss francs, with 8.1 billion francs worth of losses incurred during the last three months of the year.

The bank, which is one of the worst-hit globally by the United States subprime home-loan crisis and the ensuing financial market fallout, said more jobs would go this year at its investment bank unit, which was responsible for most of the damage incurred by the bank.

After posting its second consecutive full-year loss, the bank's chief executive officer Marcel Rohner reiterated a projection made earlier that the bank would be profitable in 2009.

He said the bank has had "an encouraging start" this year, with positive inflows of assets at its wealth management and asset management units.

"We have had positive net new money in January and an encouraging start into the year. That also refers to trading in investment bank," chief executive officer Marcel Rohner told journalists during a conference call.

Stemming a haemorrhage of assets has been a key concern at the bank, as clients withdrew a net 83.6 billion francs worth of assets in the third quarter and 85.8 billion worth in the last three months of the year.

"Overall net new money outflows were particularly heavy in October, but slowed down progressively in November and December," said the bank.

However, the bank warned that it remained "cautious" and that it would continue to cut costs and risks.

It announced another 2,000 job cuts in its investment banking unit on Tuesday, bringing the total job losses since October 2007 to 11,000.

"Financial market conditions remain fragile as company and household cash flows continue to deteriorate. On the other hand, governments are taking very substantial measures to ease fiscal and monetary conditions," the bank noted.

"Our near-term outlook remains cautious, and UBS will continue its programme to strengthen its financial position through reductions in risk positions, risk weighted assets, total assets and operating costs," it added.

An icon of Swiss banking, UBS has experienced two very turbulent years, with billions in asset writedowns and losses that forced it to take on an emergency state aid package worth almost 60 billion dollars late last year.

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