Chillin' out till it needs to be funded
UBS made a first-quarter loss and will cut another 11 percent of staff, its new chief executive said on Wednesday, warning that Switzerlands largest bank still faces an uncertain future.
Chief Executive Oswald Gruebel, the veteran former Credit Suisse boss pulled out of retirement in February to get UBS back into shape, said the bank will post a first-quarter loss of nearly 2 billion Swiss francs $1.74 billion, mainly due to writedowns and outflows at its prized wealth management unit.
He was due to tell the banks annual general meeting that he aimed to cut staff to 67,500 in 2010 from 76,200 at the end of March in a bid to save up to 4 billion francs.
The new cuts come on top of thousands already announced during the crisis and mean UBS will have shrunk its workforce by almost a fifth from a headcount peak of 83,800 a year ago.
“Unfortunately I am not able — as yet — to offer you any good news. Instead I am forced to present you with another round of unsatisfactory performance figures and to announce further drastic measures,” Gruebel said in the text of his speech.
“Our outlook remains cautious and we face many uncertainties. We have to prepare ourselves for this even though we are entitled to be very optimistic about the longer-term prospects for our bank.”
UBS shares, which rallied on Tuesday on expectations of big job cuts, were down 9 percent at 12.07 Swiss francs at 0708 GMT 3:08 a.m. EDT, compared with a 3 percent weaker DJ Stoxx European banking index as traders said the loss was bigger than expected.
“The result is a huge disappointment. After the unexpectedly good figures from Goldman Sachs and Wells Fargo and optimistic comments from Deutsche Bank about the first months, we were expecting at least a flat result from UBS,” one said.