New UBS chief to cut more jobs

UBS will cut nearly 2,000 jobs at its investment bank as it pares back its risky assets by nearly half in order to focus on wealth management.

The bank has also cut its return-on-equity target to 12 to 17 per cent for 2013, from 15 to 20 per cent, vowed to leave proprietary trading and said it will pay its first dividend for five years as it seeks to pacify shareholders after the “rogue” trading scandal.

New chief executive Sergio Ermotti told investors: “We have chosen to substantially reduce the risk profile of the bank by exiting and downsizing businesses which are not value added to our client franchise or deliver unattractive risk-adjusted returns.”

The investment bank, which currently has 17,900 staff, will be cut to 16,500 by the end of 2013 and 16,000 by the end of 2016. It hopes to make the majority of the changes through natural wastage and restructuring rather than redundancies.

A spokeswoman said a net 300 to 400 more jobs would go on top of 3,500 staff it said in August it would cut globally. She said the number of people leaving in London would be very small but declined to rule out redundancies.

UBS will also cut by nearly 50 per cent investment bank risk-weighted assets of SwFr300bn (£207bn) by 2016 as the division is shrunk to being a service provider to the private bank.

The bank will propose a dividend of SwFr0.10 per share for 2011.