UBS SA, the largest Swiss bank, said yesterday it would post a pretax loss of up to 800 million Swiss francs (US$690 million) in the third quarter, mainly because of losses linked to the US subprime mortgage crisis.
The losses will hit UBS's Investment Bank, but "our Global Wealth Management and Business Banking and Global Asset Management businesses continue to record good results," a company statement said.
The loss will result in the shedding of 1,500 jobs from the bank's work force of 80,000 people by the end of this year, chief executive Marcel Rohner said in a conference call.
He also said the bank was making changes in top management as a result of the losses, and that he would take over as investment banking chief, replacing Huw Jenkins, who will step down to become an adviser. Group chief financial officer Clive Standish will retire, Rohner said.
"UBS operates on the principle that management is accountable to shareholders," he said. "These events have led to the management changes announced today."
"Following a write down of positions in fixed income, rates and currencies, mainly related to deteriorating conditions in the US subprime residential mortgage market, UBS is likely to record an overall group pretax loss of between SF600 million and SF800 million for the third quarter, ended Sept. 30," a bank statement said.
It said pretax profits for the first nine months of this year will be about SF10 billion.
Rohner noted that when second-quarter results were announced in August he said that UBS could expect a "very weak trading result in the Investment Bank" if turbulent conditions continued to prevail throughout the quarter.
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