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.
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 yesterday 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, would “continue to be significant global player in its core businesses”.
Ahead of the cuts, the value of UBS’s stock rose 7.3 per cent to close at 13.12 Swiss francs (£8.73) in Monday on the Zurich exchange.
The bank posted a net loss of 2.17 billion Swiss francs (£1.44 billion), compared with a profit of 1.02 billion Swiss francs (£679m) during the same three-month period through September 2011. But after adjustments pre-tax profit came in at 1.4 billion Swiss francs in the reported quarter.
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, would “continue to be a significant global player in its core businesses”.
The bank attributed some of the loss to a pretax charge of 863 million Swiss francs (£574m) 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.
Meanwhile, Deutsche Bank said yesterday that its net profit slipped by 3 per cent in the third quarter compared with a year ago.
Germany’s largest bank saw higher costs for streamlining its business and from credit write-offs on loans and investments that went sour.
Net profit fell to 755 million euros (£607m) from 777 million euros (£625m) in the same quarter a year ago. Revenues rose 18 per cent to 8.7 billion euros (£7 billion).
The bank said revenues were up at its investment banking operation because of improving market conditions.