Gloomy outlook from UBS

Swiss bank UBS says a restructuring of its investment banking business had failed to give it the improvements hoped for.

That division have been hit by the eurozone debt crisis and worries about the global economy so UBS is predicting further weakness in earnings.

The bank said its latest quarterly net profit shrank to the equivalent of 325 million euros.

Investment banks had a very difficult time last year as trading and advisory income was hammered as clients pulled back from markets due to the eurozone debt crisis, and stopped doing deals.

US rivals including Goldman Sachs and JPMorgan posted weak fourth quarter income, and Deutsche Bank also fell to a fourth quarter loss due to a slump in bond trading.

UBS said it was making progress on delivering on plans to cut the total number of people working there by almost 4,000, with total staff down 1,101 in the quarter to 64,820 at the end of 2011, but said it would have to slash more costs if market conditions worsen.

The bank stressed its eurozone exposure was relatively low, in comparison to Deutsche Bank which recently posted a fourth-quarter loss amid one-off charges such as Greek debt writedowns into the quarter.

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