KIAN ABOUHOSSEIN | JP MORGAN
We believe staff reductions are mainly related to fixed income as well as support functions. We estimate the fixed income business has 2,000 front office personnel. So, in our view staff reduction of about 6,000 is more realistic, which would still be nine per cent of employees at the end of the second quarter and lead to cost savings of around SFr2.2bn.
ANDREW LIM | ESPIRITO SANTO
Despite the positive reaction to reports UBS is undertaking a radical investment bank restructuring, we believe it still does not do justice to the potential significant capital release. We accept there is likely to be material book value erosion from restructuring, but do not believe these come close to erasing the estimated SFr20bn capital released from the plan by 2016.
JON PEACE | NOMURA
Credit Suisse and UBS had broadly similar cost/income ratios in the first half of 2012, on similar annual underlying cost bases. Since the first half, Credit Suisse has now increased its additional cost-savings target by SFr2bn or 9.5 per cent. With UBS also a long way through its 2013 plan, we believe a similar SFr2bn medium-term cost reduction could be feasible.