Staff cuts at UBS’s wealth management division will
predominantly affect its back office, IT and front office
departments, Mediobanca analyst Christopher Wheeler predicted.
UBS’ wealth management division could be reduced by as much as
1,000 staff globally as the Swiss banking giant cuts 3,500 jobs to
save CHF450m ($570.5m) in the second half of 2011.
The cuts are in line with many of its global competitors,
including Barclays and Bank of America, and come as it battles
rising cost pressures driven by the strong Swiss franc.
UBS’ Asian wealth business is safe
Wheeler said that UBS realised that the only market in decline
is the offshore European market.
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He speculated that there would be some changes in UBS’s wealth
operations in Europe.
UBS’s wealth management division covering clients outside
Switzerland reported CHF2.9bn of asset outflows for the first half
of this year. Its Asian wealth management arm attracted CHF7.1bn of
Wheeler said that if the wealth unit in Asia is to be affected,
it will only be “around the edges” as UBS are consolidating certain
“Asia’s obviously been a driving force of this business’ net new
money recently and it is unlikely that they will do anything to
damage what is at the moment their biggest source of net new
money,” concluded Wheeler.
Rising cost/income, “small” sacrifice
The job cuts will affect about 5.3% of the bank’s total
workforce as it tries to trim CHF2bn in expenses from annual costs
by the end of 2013.
Of the expected 3,500 staff reductions, about 35% will be from
its Wealth Management & Swiss bank operations and 10% from
Wealth Management Americas.
Its investment bank is predicted to lose 45% of the total
affected staff and the global asset management business – 10%.
UBS’ assets under management stood at CHF1.39trn as at 30 June
2011, while its overall cost-to-income ratio reached 75% for the
first half of 2011, up from 70.5% a year before.