UBS update on cost reduction plans
Zurich/Basel, 23 August 2011 - UBS today provides an update on its plans to eliminate expenses of a total of approximately CHF 2 billion from annual costs by the end of 2013, consistent with our announcement on July 26, 2011. These plans include savings associated with headcount reductions of approximately 3,500, which will be achieved through redundancies as well as natural attrition, and further real estate rationalization.
UBS expects to recognize restructuring charges of approximately CHF 550 million in connection with its cost reduction plans, approximately CHF 450 million of which will be booked in the second half of 2011. The substantial majority of the expected CHF 450 million charge will be recognized in the third quarter of 2011. The restructuring charges reflect costs related both to personnel (approximately CHF 400 million) and to real estate (approximately CHF 150 million).
Of the expected CHF 550 million in restructuring charges, approximately 55% is expected to be incurred in the Investment Bank, 30% in Wealth Management & Swiss Bank, 10% in Global Asset Management, and 5% in Wealth Management Americas.
Of the expected 3,500 staff reductions, approximately 45% will come from the Investment Bank, 35% from Wealth Management & Swiss Bank, 10% from Global Asset Management, and 10% from Wealth Management Americas.
These numbers include Corporate Center headcount and charges allocated to the business divisions. The actual number of redundancies is subject to employee consultation as required under the applicable local rules.
The measures announced today are designed to improve operating efficiency. UBS will continue to be vigilant in managing its cost base while remaining committed to investing in growth areas.
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This release contains statements that constitute 'forward-looking statements', including but not limited to the anticipated effect of the initiatives described herein on UBS's business and future development. While these forward-looking statements represent UBS's judgments and expectations concerning the matters described, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from UBS's expectations. These factors include, but are not limited to: developments in the markets in which UBS operates or to which it is exposed; changes in the availability of capital and funding; the ability of UBS to comply with recommended Swiss capital requirements without adversely affecting its business; changes in UBS's competitive position; the degree to which UBS is successful in effecting organizational changes and implementing strategic plans, and whether those changes and plans will have the effects intended; and UBS's ability to retain and attract the employees necessary to generate revenues and to manage, support and control its businesses. Our business and financial performance could be affected by other factors identified in our past and future filings and reports, including those filed with the US Securities and Exchange Commission (SEC). More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBS's Annual Report on Form 20-F for the year ended 31 December 2010. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.