UBS plans to shed 5,500 jobs amid market turmoil

UBS, the embattled Swiss financial giant, has announced 5,500 job losses as the bank's woes continue to take a toll on its core wealth management business.

The cuts, which total about 7 per cent of the bank's workforce, include about 2,600 at the investment banking business that has plunged UBS into turmoil.

The investment banking cuts will be compulsory but UBS said it hoped other reductions could be made through unforced departures and moving people to other jobs. Casualties in London are said to number fewer than 700. The reductions come on top of 1,500 investment-banking job cuts already made.

UBS is the biggest casualty of the credit crunch among major European banks. Massive writedowns of more than $37bn (£18.8bn) have cost the jobs of its chief executive, Peter Wuffli, and the chairman, Marcel Ospel. The bank has raised about 39bn Swiss francs (£18.8bn) in capital to reassure wealthy clients that it is a safe institution.

UBS said its tier-one capital ratio at the end of the first quarter was a strong 11.8 per cent, and that it did not need to raise more capital. But its problems appeared to deter wealthy clients from giving it business.

Net new money at UBS's wealth management business was SFr5.6bn. But clients in Switzerland, where confidence has been rocked by the bank's ills, withdrew a net SFr1.9bn in the first quarter. Swiss business banking and global asset management had SFr18.4bn of outflows. The bank said that its performance was affected by general market conditions such as the weak dollar and lower wealth generation.

UBS announced a deal with BlackRock, the US asset manager, to sell $15bn of mortgage securities in what it said was a sign that the market for distressed assets was recovering.

"The same is true for UBS as for the entire sector: the worst is likely over," said analysts at Wegelin, the Swiss bank. "However, there is little momentum for the future. Even if job cuts are able to lower costs, the current outlook is anything but rosy."

UBS reported a first-quarter loss of SFr11.535bn, slightly below analysts' expectations. The shares closed down 4.5 per cent at SFr35.22.

In a further blow to Swiss financial services, Swiss Re, the world's biggest reinsurer, made fresh credit write-downs of SFr819m. Swiss Re has been hit hard by the credit crisis, notching up write-downs at its financial services unit, which creates products to transfer risk to capital markets.

Top banker held in US tax probe

The head of UBS's wealth management business for the Americas, Martin Liechti, was detained as part of a tax fraud investigation when he passed through Miami airport last month. The Department of Justice is looking into whether UBS helped its private clients to hide investments outside the US and illegally avoid US taxes. Mr Liechti, who is based in Zurich, has been told not to leave the US because he is a "material witness" to the investigation. UBS declined to confirm that the person detained was Mr Liechti. In a statement last night, the bank said: "Our understanding is that the respective employee, who has not been charged with any wrongdoing by the US government, will remain in the US pending discussions with the authorities regarding reso-lution of his status as a witness."

Suggested Topics
Life and Style
“What is it like being a girl?” was the question on the lips of one inquisitive Reddit user this week
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
Luis Suarez looks towards the crowd during the 2-1 victory over England
Life and Style
Swimsuit, £245, by Agent Provocateur

Diving in at the deep end is no excuse for shirking the style stakes

German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
ebookA unique anthology of reporting and analysis of a crucial period of history
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business


£50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

(Junior) IT Systems Administrator / Infrastructure Analyst

£28000 - £32000 per annum + pension, 25 days holiday: Ashdown Group: A highly ...

Finance Officer

Negotiable: Randstad Education Birmingham: Randstad Education are seeking a Fi...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice