UBS could cut 10,000 more jobs

Stricken Swiss bank UBS was preparing to complete a clean sweep of its leadership at an annual meeting today amid reports that the new management could cut another 10,000 jobs.

The world's biggest wealth manager, which has been among the hardest hit in the financial crisis, has already pared down 11,000 jobs from its payroll since October 2007.

But media reports over the weeked indicated that new chief executive Oswald Gruebel, who took over the post in late February, could announce 10,000 more job cuts in a bid to secure a turnaround.

Swiss weekly Sonntagszeitung said on Sunday that back room staff were likely to be the most affected. Switzerland's biggest bank had 77,783 employees at the end of 2008.

A UBS spokesman declined to comment on what he called "speculation".

But yesterday, UBS announced that 240 jobs will be cut from its wealth management division in the Asia-Pacific region.

"Asia Pacific remains a strategic priority for the group, and a region in which it will continue to invest," UBS said in the statement released by its Singapore office.

"However, in common with its competitors, the slowdown in the global economy and the ongoing challenging economic conditions, have prompted a renewed focus on the management of costs including, as a last resort, those related to staff," it added.

UBS received a multi-billion dollar state support package late last year - the only Swiss bank to need public aid. Media reports in recent weeks have also suggested that it could post another two billion Swiss francs in writedowns.

Yet, on the eve of the AGM, the bank's share price surged by 13.7 per cent in morning trading on the Swiss stock exchange.

"The rumours of job cuts have been positively greeted by shareholders and the very strong results at Goldman Sachs should also lend support to the stock," a Zurich-based trader said.

US banking giant Goldman Sachs reported Monday a quarterly net profit of $1.81 billion that far exceeded market expectations and announced a massive $5-billion share issue to help repay government aid.

Today's shareholder's meeting was widely expected to be a smooth endorsement of the new board members and Gruebel, a 65 year-old banking veteran credited with turning around rival Credit Suisse who was plucked out of retirement to accomplish a similar task at UBS.

The AGM is due to approve the nomination of former Swiss finance minister Kaspar Villiger as chairman, replacing former legal counsel Peter Kurer who is stepping down only a year after he was promoted to try to revive the bank's fortunes.

The other new board members would inject much needed financial services experience, replacing directors with largely corporate or legal profiles and completing changes that began at an extraordinary general meeting in October 2008.

They include Anne Godbehere, the former chief financial officer of Northern Rock, who was drafted into the ailing British building society after it plunged into trouble, as well as engineering group ABB's financial chief, Michel Demare, and the chief risk officer at Zurich Financial Services, Axel Lehmann.

UBS posted a 20.9 billion Swiss franc ($19 billion) net loss in 2008, after suffering heavily from its exposure to the US subprime home loans market and the subsequent credit crunch.

It also lost about 228 billion Swiss francs in assets as unsettled customers closed accounts and deserted Switzerland's most prominent high street bank last year.

Gruebel has already signalled that he would be taking a close look at the risks the bank has assumed, and control its costs.

One of his biggest challenges is in the United States, where UBS still faces a US government lawsuit to recover the details of some 52,000 US customers suspected of tax offences.

The bank was forced to pay $780 million to US justice authorities in February to settle other charges of assisting tax fraud.