3 Oct 2008

Swiss bank UBS to shed more staff

9:21 pm on 3 October 2008

Switzerland's biggest bank UBS announced on Friday it would cut 2,000 more jobs as it revamps its investment bank which had been battered by the subprime mortgage crisis in the United States.

The latest lay-offs would bring the staff levels in the investment bank unit to approximately 17,000 by the year-end, 6,000 less than the peak level in the third quarter of 2007, the bank said.

UBS had been forced to write down more than $US42.5 billion worth of assets and post successive losses when the US subprime mortgage market soured.

On Thursday, UBS said however that it has turned a corner, with its third quarter expected to yield small profits.

The Swiss bank said its investment unit would cease dealing in commodities as well as "substantially downsize" real estate and securitisation trading.

Chairman and chief executive officer of UBS Investment Bank Jerker Johansson explained that the ongoing financial crisis "require us to recalibrate our business.

"While the revenue outlook is uncertain, these measures will allow us to focus on our strengths, reduce the cost base to a more sustainable level and position our core businesses for growth once fundamentals improve," he said.