UBS announces further sub-prime losses

Switzerland’s largest investment bank, UBS, has announced its intention to split itself into three divisions after it revealed second quarter losses of SwFr358 million (£173 million).

The bank’s sub-prime debt write-downs in the quarter totalled SwFr5.5 million. However, this was much less than the SwFr11.54 billion it lost in the first quarter.

The bank again blamed the losses on its investment in securities linked to US sub-prime mortgages.

The three units it will separate into will be global wealth management and business banking, global asset management and the investment bank. The bank said reorganising itself into three autonomous units would make it more effective and agile in managing trends in the financial industry.

The UBS brand will continue to be used by all its units and bonuses in each division will be linked to the performance of that unit rather than the group as a whole.

It has also emerged that Marco Suter, who took over after the previous chief financial officer Clive Standish retired from the group in October 2007, wishes to step down.

He is to be replaced by John Cryan. UBS is also nominating four new directors to the board and restructuring the management team.

Since the end of the first quarter, UBS has reduced its workforce by 2,387 to 81,452 after it was hit by heavy losses and is one of Europe’s largest victims of the credit crunch.

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