Page last updated at 06:42 GMT, Tuesday, 6 May 2008 07:42 UK

Swiss bank UBS cuts 5,500 posts

UBS office logo
UBS has suffered more than any other bank from the US sub-prime turmoil

Swiss bank UBS, which has suffered huge losses as a result of the US sub-prime mortgage crisis and credit turmoil, is cutting up to 5,500 jobs.

The bank also unveiled losses for the first quarter of 2008 of 11.5bn Swiss francs ($11bn; 5.5bn).

UBS said it expected current "tough trading conditions" to remain, forcing the group to "actively" cut costs.

The job losses - 7% of the workforce - will go by mid-2009 through redundancy, redeployment or natural wastage.

The investment banking division will see 2,600 jobs lost, with most going through redundancy, the company said.

No further information about where the jobs would be cut was given.

High-risk investments

The first quarter has demonstrated that we can address tough challenges on our own and with the support of our shareholders
Marcel Rohner, UBS chief executive

UBS has so far reported write-downs of $37bn (18.5bn), more than any other leading bank.

In a report to shareholders last month, the bank admitted its growth strategy had been too ambitious and lacked sufficient risk control.

That plan had led to a substantial exposure in its investment banking arm to much riskier assets, including investments linked to the US sub-prime market, whose value plummeted when the housing slowdown and credit crunch took hold.

UBS said on Tuesday it had substantially reduced the level of risk in its investment portfolio since the third quarter of 2007.

"We can see tangible effects as a result of our initial responses to the losses," said chief executive Marcel Rohner in a statement.

"While our exposure is still subject to swings in market conditions, we see market demand for these securities returning in certain areas and at the current level of valuations."

Exposure to US sub-prime residential mortgages has decreased by about 60%, the company said.

Mr Rohner said he did not think the bank's problems meant it had to seek a merger with another company.

"The first quarter has demonstrated that we can address tough challenges on our own and with the support of our shareholders," he said.

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