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29 November 2023

UBS slumps to biggest loss in history for a Swiss firm

UBS will axe 2,000 more jobs as it restructures. (GETTY IMAGES)

By Reuters

UBS posted the biggest ever annual loss for a Swiss firm yesterday, but said client withdrawals reversed in January and it will axe 2,000 more jobs as it restructures to focus on wealth management.

UBS reported a 8.1 billion Swiss franc (Dh26.7bn or $7bn) net loss in the fourth quarter, missing a Reuters poll forecast for $7.1bn. UBS's loss for 2008 came in at SWF19.7bn, above analysts' predictions for SWF18.7bn.

The quarterly loss came on the back of a hefty SWF8.8bn trading loss, as well as charges it made after selling billions in toxic assets to the Swiss National Bank when it was rescued by the state in October.

Chief Executive Officer Marcel Rohner said the world's biggest wealth manager was not paying a 2008 dividend but still aims to return to profit in 2009 after seeing some positive signs at the start of the year.

"While we leave a bad year behind us... we can nevertheless report substantial progress," Rohner said. "Our businesses are well positioned for a challenging future. We had an encouraging start into the new year but the environment will remain difficult and volatile as the real economy has not seen the worst yet."

UBS continued to suffer massive outflows in the fourth quarter at its core wealth management business. But the Swiss bank said net new money had turned positive in both wealth management and asset management in January, the first time after a streak of negative quarters. It did not give details.

UBS also announced structural changes to refocus the bank on its core Swiss businesses, its global wealth management operation and on the growth potential of its onshore business.

UBS said it was continuing to cut the size of its troubled investment bank, saying it aimed to bring its total staff to about 15,000 from 17,171 now.

UBS said its Tier 1 capital ratio, a key measure of financial strength, rose to 11.5 per cent at the end of 2008 from 10.8 per cent at the end of the third quarter.