UBS axes 3,500 jobs to cut costs

SWITZERLAND’S biggest bank UBS is to axe 3,500 jobs to shave 2 billion Swiss francs (€1.72bn) off annual costs as it joins rival investment banks in reversing the post-crisis hiring binge and preparing for a tough few years.

UBS said almost half the cuts would be in investment banking. It had already said it would cut jobs when it posted weak second-quarter profits last month as its underperforming fixed-income business weighed on the balance sheet. Like rival Credit Suisse Group, UBS has been grappling with rising regulatory costs and a red-hot Swiss franc.

“The cost-cutting is an admission of defeat. UBS over-hired after its near-collapse in early 2009, but was unable to win back market share,” said Kepler Capital Markets analyst Dirk Becker.

“With more difficult markets, the economics of its investment bank became so uncompelling that the group now has to retreat,” Mr Becker said.

Investors will focus on UBS’s investor day in November for more insight into its plans for its fixed income unit, which it has put under review.

Tougher regulation has added pressure to shrink balance sheets and exit some business areas. That has put more scrutiny on costs, which are seen as particularly high at Switzerland’s top two banks.