Prospect of UBS cutting further jobs lifts shares

 
Tim Wallace
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SHARES in Swiss bank UBS soared yesterday in anticipation of a new widespread round of job cuts at the institution, which are expected to be announced along with its third
quarter results today.

The bank is expected to announce up to 10,000 positions will go, largely in the fixed income units of its investment banking arm.

That amounts to up to one-sixth of its global workforce, and would represent a large step up from the 3,500 job cuts previously announced.

Instead the bank is likely to focus resources on its wealth management business, which has been a more profitable unit.

Shares jumped 7.28 per cent yesterday as investors looked to welcome the cost-saving steps. If the announcement does come, UBS will join an industry-wide rush to reduce costs to shore up profits at a time of weak market activity and increased regulatory pressures.

In recent months rival institutions including Nomura, Deutsche Bank and Credit Suisse have all announced plans for more job losses to shore up profits and restructure their businesses.