UBS to split with own investment bank
29 October 2012
UBS will split with its struggling investment bank next week in a move that would lead to a loss of 10,000 jobs across the Swiss banking group.
Switzerland's biggest bank by assets plans to bring large parts of its fixed income trading business into a non-core unit leaving a reduced investment bank with equities trading, foreign exchange advisory roles.
The non-core operation would be headed by Carsten Kengeter, current co-head of the investment bank, and would be wound up over time, the Financial Times reported citing two people close to the development.
The split would cut risk-weighted assets of up to SFr100 billion ($107 billion) resulting in loss of thousands of jobs in the group's back office over the next few years.
The bank would shed a sixth of its 63,500 strong workforce at the end of June. The job cuts would not happen at once and the exact number remains unclear at present with the impact on back-office functions yet to be fully determined. The move comes even as another programme to cut 3,500 jobs is ongoing.
According to analysts, the move highlights how banks across the world are trying to adapt to a radically altered regulatory and market regime that has left them with lower returns and higher capital needs for certain business areas and national subsidiaries.