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
News
peoplePerformer had recently been diagnosed with prostate cancer
News
The surrealist comedian at the Q Awards in 2010
people
News
i100
Arts and Entertainment
Media baron Rupert Murdoch owns News Corps and 20th Century Fox
theatrePlaywright David Williamson is struggling to find a big name to star as the media mogul
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
News
i100
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Arts and Entertainment
JK Rowling will not be releasing a 'romance' novel anytime soon
books
Life and Style
tech

Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SQL Developer with T-SQL, Watford, Hertfordshire - £350 - £360

£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?