Tuesday 7 January 2020 4:03 pm

UBS to cut 500 jobs as firm begins wealth unit revamp

UBS will cut up to 500 jobs at its wealth management business as division co-head Iqbal Khan looks to tackle flagging profit at the bank.

The cuts, which amount to roughly two per cent of the division’s workforce, will get rid of three layers of management and split the firm’s Europe, Middle East and Africa (EMEA) business into distinct entities.

Read more: UBS wealth arm pessimistic about UK earnings in 2020

The move was revealed in an internal memo which was seen by Reuters.

The changes are the first big shake up since the bank appointed Khan in October to lead its wealth management business alongside Tom Naratil.

Caroline Kuhnert will lead the new Central and Eastern Europe division, with Ali Janoudi appointed head of the Middle East and Africa.

Christl Novakovic, who had been head of the former EMEA unit, will lead the main European business.

In the past year, the Swiss bank has seen profit stall, which has led to scrutiny from some quarters over whether the firm should update its strategy.

Khan made a string of similar changes at rival bank Credit Suisse, where he more than doubled profits in his division during his four year tenure.

There are also plans to increase collaboration with UBS’s asset management division and investment bank, in order to provide more financing options for wealthy clients.

In a call with journalists, Naratil said: “We’re giving [clients] a broader variety of solutions which are available to our corporate and institutional clients through the investment bank.”

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In 2018 the firm set a target to increase new loans for wealthy clients by $20 to $30bn a year.

However, loan volumes have not yet begun to pick up, which managers have attributed to the firm’s complicated bureaucracy, as well as ongoing aversion to risk.