Swiss Banking News: May 2008

06.05.2008 UBS has reported financial results for the first quarter of the year 2008, - the loss in the amount of CHF 11,535 mln, down from a net profit of CHF 3,031 mln that was in the first quarter of 2007. The net new money in the two wealth management businesses was CHF 5.6 mln, the Business Banking Switzerland branch had net outflows in the amount of CHF 1.9 billion. Global Asset Management branch had net outflows in the amount of CHF 16.5 billion. UBS expects financial industry conditions to remain difficult, with a continuing unfavorable global economic climate, deleveraging by institutional and private investors, slower wealth creation, lower trading and capital market activities. This will require UBS to manage with maximum efficiency costs, resources and capacity. For this period, UBS reports a Group net loss attributable to shareholders in the amount of CHF 11,535 mln. However, taking into account more difficult market conditions, and with the exception of the additional losses experienced on UBS's positions affected by the US mortgage and credit market turbulence, revenue performance in most of the bank's businesses was satisfactory.

06.05.2008 UBS announced the intention to cut 5,500 jobs, which represent 7% of staff of Switzerland's largest bank. Reduction of the staff became the result of reporting a net loss of $10.97 billion for the first quarter of the year 2008. The changes are to be made by the mid of next year through redeployment, redundancy or natural wastage. UBS will cut 2,600 jobs in its investment banking branch, blamed for the majority of failures that have resulted in the record writedowns of $37.4 billion since last year summer period. The other 2,900 jobs of that amount will go in other parts of the business. Also, on Tuesday UBS said that it has reduced its exposure to subprime-related assets by 60% since the third quarter of 2007.
The bank sent a letter to its Swiss customers, acknowledging their "concern and disappointment" and informing them that the bank remains strong thanks to its solid capital base.