UBS is to cut 5,500 jobs, 7% seven per cent of the people who work there and this comes on top of 1,500 previous lay offs. The Swiss bank is Europe’s biggest casualty of the subprime mortgage debacle and most of the job cuts involve its US and UK investment banking sectors.
UBS reported a first-quarter loss of just over seven billion euros – less than analysts had expected. Asked why the bank had made such large losses, chief executive Marcel Rohner said: “They came from the US real estate sector and our problematic positions there. That is what accounts for the greatest losses during this quarter.”
UBS is also planning to sell some subprime mortgages to US asset manager BlackRock. With a face value of 14 billion euros, they will be sold for 9.7 billion euros.
The bank cautioned that conditions in financial markets are still tough. Its shares dropped over 5% with investors fearful that its earning power may have been permanently damaged.