UBS AG, the European bank with the biggest losses from the credit crisis, plans to eliminate about 1,900 jobs in its investment banking, equities and fixed income units, two people with knowledge of the matter said.
The bank may announce the plans at today’s shareholder meeting, said the sources, who declined to be identified because they weren’t authorized to discuss the cuts, which would amount to about 10 percent of the total investment banking staff.
Support staff jobs will also go, the sources said. Rohini Pragasam, a UBS spokeswoman in New York, declined to comment.
UBS, Switzerland’s biggest bank, is scaling back its investment banking unit, which it plans to separate from wealth and asset management after mounting writedowns prompted rich clients to withdraw funds for the first time in almost eight years. The cuts add to the 7,000 already announced by Zurich-based UBS, and would bring to more than 131,700 the total number of jobs eliminated at banks worldwide since July of last year.
“It is unquestionably the worst hiring climate I’ve seen in 30 years in the city for the European markets,” said Shaun Springer, chief executive officer of Napier Scott Executive Search Ltd in London.
UBS rose 4 percent to 19.19 Swiss francs (US$17.21) at 10:35am in Zurich trading. The bank has dropped 58 percent so far this year, paring its market value to about 56 billion Swiss francs.
UBS has taken writedowns and credit losses of US$44.2 billion since the credit crisis began last year, more than any other European bank.
Chief executive officer Marcel Rohner and chairman Peter Kurer, trying to stem client redemptions and record share price declines, will brief shareholders today on efforts to scale back the investment bank and overhaul the board. UBS is scheduled to report detailed third-quarter earnings on Nov. 4.
Lehman Brothers Holdings Inc, the securities firm that filed for bankruptcy two weeks ago, on Tuesday eliminated 750 jobs in its European fixed income and personal investment management units after talks to find a buyer failed. Nomura Holdings Inc, Japan’s biggest securities firm, agreed to buy Lehman’s European investment banking and equities units in Europe along with its Asian-Pacific unit. London-based Barclays PLC purchased Lehman’s US investment banking unit for US$250 million.
European governments have come to the rescue of five banks this week as the worst financial crisis since the Great Depression spreads beyond the US.
Belgium, the Netherlands and Luxembourg agreed to inject 11.2 billion euros (US$15.8 billion) into Fortis for minority stakes, while Belgium and France led a 6.4 billion euro bailout of Dexia SA. Bradford & Bingley PLC was seized by the UK government, Iceland’s Glitnir Bank hf was bailed out by the country’s Financial Supervisory Authority and Germany’s Hypo Real Estate Holding AG received a government loan guarantee.
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