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Investment Bank
Business description
The Investment Bank comprises the following business units:
The equities business area distributes, trades, finances and clears cash equity and equity-linked products. It also structures, originates and distributes new equity and equity-linked issues and provides research on companies, industry sectors, geographical markets and macro economic trends.
The fixed income, currencies and commodities (FICC) business area delivers products and solutions to corporate, institutional and public sector clients in all major markets.
The investment banking department provides advice and a range of execution services to corporate clients, financial sponsors, sovereign wealth funds and hedge funds. Its advisory group assists on complex transactions and advises on strategic reviews and corporate restructuring solutions, while UBS’s capital markets teams arrange the execution of equity and debt issues worldwide.
Performance in 2008
The Investment Bank recorded a pretax loss of CHF 34,092 million in 2008, compared with a pre-tax loss of CHF 16,669 million in 2007. The change was primarily due to losses on risk positions in FICC.
During this period: equities revenues decreased 42% to CHF 5,184 million; FICC revenues decreased to negative CHF 31,687 million from negative CHF 16,837 million; investment banking revenues fell 57% to CHF 2,880 million; and operating expenses declined 37% to CHF 9,925 million, with personnel expenses down 57%.
Business division reporting
| As of or for the year ended | ||
|---|---|---|
CHF million, except where indicated | 31.12.08 | 31.12.07 |
Investment banking | 2,880 | 6,636 |
Sales and trading | (26,504) | (7,833) |
Credit loss (expense) / recovery | (2,575) | (266) |
Total operating income excluding own credit | (26,199) | (1,463) |
Own credit | 2,032 | 659 |
Total operating income as reported | (24,167) | (804) |
Total operating expenses | 9,925 | 15,865 |
Business division performance before tax | (34,092) | (16,669) |
Personnel (full-time equivalents) | 17,171 | 21,779 |
| Repositioning |
The Investment Bank is in the process of repositioning itself toward client-driven growth, combined with a further reduction of its balance sheet and risk positions and the implementation of a new market-based funding model and robust risk framework. UBS simplified the structure of FICC to emphasize the client business and reduce risk and balance sheet usage. The municipal securities business and fixed income proprietary trading businesses have been closed and certain commodities businesses have been sold. Real estate and securitization businesses and complex structured products have been substantially downsized or exited. |
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© UBS 1998-2009. All rights reserved.
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| UBS has restated its annual report for 2008 on May 20, 2009, including the financial statements and other information. | | | | | |
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