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UBS announces repositioning of its Investment Bank
Business model builds on core strengths and client franchises in the Securities and Advisory businesses, while downsizing or exiting certain businesses; recalibration to the market environment.
UBS today announces the repositioning of its Investment Bank following a detailed review of the strategy by the Chairman and CEO of the Investment Bank, Jerker Johansson, members of the Group Executive Committee and the UBS Board of Directors.
The Investment Bank will reprioritize its business portfolio to preserve its core strengths and client franchises across Equities, IBD and FICC, while downsizing or exiting certain business activities. This will lead to greater efficiencies and a further reduction in the Investment Bank's headcount and balance sheet.
"The ongoing crisis in the financial markets and dramatically changed industry dynamics require us to recalibrate our business. While the revenue outlook is uncertain, these measures will allow us to focus on our strengths, reduce the cost base to a more sustainable level and position our core businesses for growth once fundamentals improve," said Jerker Johansson, Chairman and CEO of UBS Investment Bank.
As part of the repositioning, UBS Investment Bank will take the following steps:
Continue to build on its Equities business by leveraging its strengths in cash distribution, derivatives and prime services, while seeking further efficiency gains
Maintain its leading position in Investment Banking to provide clients with strategic advice and access to the capital markets
Reposition its Fixed Income, Currencies and Commodities (FICC) business around client servicing and facilitation. The Investment Bank will exit Commodities (excluding Precious Metals); substantially downsize Real Estate & Securitization and Proprietary trading; and preserve its core Foreign Exchange, Rates and Credit businesses
UBS has already taken a number of actions to reduce its balance sheet, implement a new market-based funding model, and reduce risk and headcount. Today's announcement will lead to further reductions, with the aim of bringing the cost base to a more sustainable level.
The Investment Bank will reduce net headcount by an additional 2,000, bringing staffing levels to approximately 17,000 by year-end, a reduction of around 6,000 since the peak in third quarter 2007. Reductions will be predominantly targeted to businesses being exited or downsized in order to protect and sustain our core client franchises.
"A right-sized Investment Bank, positioned alongside the world's premier Wealth Management and leading institutional Asset Management business, will enable UBS to position itself as one of the core group of universal banks that are likely to dominate in this redrawn landscape," said Jerker Johansson.
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