The Banking and Strategy Initiative

Chillin' out till it needs to be funded

There's more than two things wrong with UBS

UBS sign featuring logo including three keys

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UBS remains one of the few banks whose recovery strategies have been less than efficient with its risky bets unable to bring it near the big leaague. On top of questions on its performance,some logistics issues have seemingly arisen with its latest plans to exit 5000 people from the investment bank unit. The US operation , yet headquartered at Stamford, Connecticut may be completely stripped down and brought into the current New York operation.

With the Swiss Cocos already being questioned for Basel 3 Tier I qualification, the bank might yet follow HSBC’s example and relocate strategically into the “vacant spot” left by HSBC’s moving headquarters in London. Here again, UBS has hit a wall as the Culture Ministry in the UK  has declared its UK headquarters buildings an architectural heritage, stopping UBS from demolishing the building for its new headquarters. Logistics problems have arisen over UBS’ plans to lease floors at the new World Trade Centre in Manhattan, with its plans in disarray and the bank recently backed off its plans for World Trade Center apparently staying put in Greenwich and even Stamford unless all the staff in that office is let go.

Also not helping the failing Swiss cause is the rumor of its use of the Fed Swaps facility for a large $200 mln on Thursday

Over 100,000 Jobs

Bloomberg data last week showed a 100k jobs from the 50 biggest banks being lost in 211 even as only 65 banks were closed down due to failures in 2011 year to date.

The 50 largest banks, including HSBC Holdings Plc (HSBA)Credit Suisse Group AG (CSGN) and Bank of America Corp. (BAC), disclosed plans for almost 60,000 reductions since Jan. 1, according to company statements and data compiled by Bloomberg Industries. At that pace, they’ll cut more than 101,000 jobs this year — the most since 192,000 positions were targeted in 2008 amid loan losses, a global credit crunch and unprecedented government bailouts.

Till May UBS had claimed it would report $23 bln in revenues for 2011. A cut of 5000 jbs will pare its workforce by nearly 8% from 64500 compared to 14% of jobs for smaller Synovus and 16% for feloow troubled colleague Lloyds Bank. HSBC plans to reduce its workforce by 30,000 but will be along with Goldman Sachs and JP Morgan recruiting in Asia and Latin America

In the last hour banks in Europe have fallen a further 4-5% continuing from a bad Thursday yesterday in both Europe and the USA

UBS had reported a 28 bln SFr loss in 2008 in a run of three years of losses and despite a strong frac a 7.5 Billion profit in 2010 while revenues moved from 64 bln SFR to 45 bln SFR for 2010. In the last two quarters it has reported muted revenues of 14 bln SFR and 13.6 gln SFR for a profit of $1 .95 bln and $1.0 bln even as the Swiss Franc has come under fire after a long run at the top last week The banks’s Capital ratios of 18% count Cocos  in Core Tier I capital and once they are disqualified they may not be able to maintain acceptable levels without tapping markets for fresh Capital The investment Bank’s profit had ticked down to CHF 376 mln(SFR 376 mln) in the latest qtr

America’s wealth team counted for a third of the net new Capital at the bank after a long hiatus with US law authorities chasing it for the lawsuit. UBS paid $780 mln in 2009 to settle the suit against allowing tax fraud on its US branch accounts. The new US tax law currently targeting Credit Suisse, ask FBAR reports to be filed for all US based accounts.

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