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April 17, 2009updated 04 Apr 2017 3:56pm

New UBS chief faces painful beginning

(Free) UBS will report a loss of just under CHF2 billion ($1.7 billion) in the first quarter and client outflows of CHF23 billion, Oswald Gruebel, the banks recently-appointed CEO, said in a speech. The result are a big disappointment after the bank previously declared it had had an improved start to the year, with client inflows turning positive after outflows of CHF123 billion in 2008. Gruebel said the outflows were mainly a result of the announcement of settlements with US authorities in connection with their investigations into cross-border services for US private clients.

By PBI Editorial

UBS will report a loss of just under CHF2 billion ($1.7 billion) in the first quarter and client outflows of CHF23 billion, Oswald Grübel, the bank’s recently-appointed CEO, said in a speech.

The result are a big disappointment after the bank previously declared it had had an improved start to the year, with client inflows turning positive after outflows of CHF123 billion in 2008.

Grübel said the outflows were mainly a result of the announcement of settlements with US authorities in connection with their investigations into cross-border services for US private clients.

However, Wealth Management Americas recorded net new money of CHF16 billion.

The bank lost a combined CHF3.9 billion on illiquid risk positions, credit loss expenses and valuation adjustments on assets transferred to the Swiss National Bank under an asset guarantee scheme.

Grübel is planning cost savings of between CHF3.5 billion to CHF4 billion by 2010, cutting 8,700 jobs from the current 76,200. He said UBS would maintain its investment banking business, though it would exit high risk areas.

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