UBS AG, Switzerland’s biggest bank, may have to cut another 2,000 to 3,000 jobs as it scales back from capital-intensive businesses, according to a research note by Deutsche Bank AG.
The Swiss bank may have to trim as many as 3,000 jobs by the end of 2013, Matt Spick, a Deutsche Bank analyst, wrote in a note to clients today. A small fixed-income and debt capital markets business isn’t practical to maintain with minimal capital behind it, he said.
“We think that most likely UBS will have to restructure again,” Spick wrote. The Zurich-based bank will probably be “back to a pure private client service business plus cash equities plus perhaps some M&A advisory to be a close equivalent to a business like Lazard.”
A spokesman for UBS in London declined to comment.
UBS said in October it will cut about 10,000 jobs and retreat from capital-intensive trading businesses at the investment bank to boost profitability. Chief Executive Officer Sergio Ermotti is overhauling UBS as stricter capital requirements and sluggish client activity hurt profit at the investment bank. UBS will focus more on its wealth-management business, the world’s second largest, to boost returns for shareholders.
The firm’s investment bank has suffered lapses that shook UBS. Losses during the subprime crisis forced UBS to seek a bailout from the Swiss government in 2008 to help it spin off toxic assets. In 2011, a $2.3 billion loss from unauthorized trading led to the exit of Oswald Gruebel as CEO.
UBS also said last month it must pay about 1.4 billion Swiss francs ($1.5 billion) to U.S., U.K. and Swiss regulators for trying to rig global interest rates, triple the penalties levied against London-based Barclays Plc.
UBS shares, which have risen about 8 percent since its strategy overhaul was announced on Oct. 30, closed at 15 francs in Zurich today.