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August 23, 2011updated 04 Apr 2017 3:48pm

UBS to cut 1000 wealth jobs, Asia safe

Staff cuts at UBSs 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.

By Ilya Timofeyev

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.

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 NNM.

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 processing units.

“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.

 

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