Swiss bank to cut 5,000 jobs

Swiss bank UBS today said it was axing around 5,500 jobs as it revealed first quarter losses of 11.5 billion Swiss francs (€7bn).

The group said it will cut 2,600 jobs in its investment banking arm by the end of the year, with the remaining roles to be trimmed across the business by mid-2009.

It is understood that the bulk of the job losses will affect UBS's American workforce.

UBS said redundancies would account for most of the investment banking job cuts, but hoped the wider reduction in roles would be achieved through natural turnover.

The bank has been one of the worst affected by the credit crunch, with today's first-quarter net loss coming after a US$19bn (€12.2bn) writedown in the first three months of the year.

It had already taken an $18.5bn (€12bn) charge from bad investments in last year's results, giving it writedowns of more than $37bn (€23.8bn) since last summer.

The first-quarter loss compares with a net profit of 3bn Swiss francs (€1.8bn) in the same period last year.

Switzerland's largest bank has been struggling to regain investor confidence amid the hefty losses, which has led shareholders to demand radical action to turn the business around.

UBS last month came under pressure from investor and former chief executive Luqman Arnold to break itself up and overhaul the board.

Shareholders approved the appointment of Peter Kurer to replace long-standing chairman Marcel Ospel after he stepped down last month and also gave the green light to a capital increase of 15bn francs (€9.2bn) as part of a turnaround plan.

It was the second capital injection after UBS raised 13bn francs (€8bn) from two foreign sovereign wealth funds earlier this year.

UBS said today it had reduced its exposure to sub-prime-related assets by 60% since the third quarter of 2007.

Chief executive Marcel Rohner said: "We can see tangible effects as a result of our initial responses to the losses. While our exposure is still subject to swings in market conditions, we see market demand for these securities returning in certain areas and at the current level of valuations."

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