Swiss bank UBS AG reported a net loss yesterday of 11.5 billion Swiss francs (US$10.97 billion) for the first quarter of this year and announced 5,500 job cuts.
This compares with a net profit of SF3 billion in the same period last year.
The losses translate to SF5.63 per share, compared with earnings per share of SF1.43 in the first quarter of last year.
The bank warned investors last month to expect net losses of SF12 billion for the first three months of this year after writing down approximately US$19 billion on US real estate and related credit positions over that period.
Switzerland’s largest bank said it would cut 2,600 jobs in its investment banking arm — blamed for the majority of failures that led to the record writedowns of US$37.4 billion since last summer.
A further 2,900 jobs will go in other parts of the business, bringing the total number of posts cut by the middle of next year to 5,500 overall.
UBS said it has reduced its exposure to subprime-related assets by 60 percent since the third quarter of last year.
“We can see tangible effects as a result of our initial responses to the losses,” CEO Marcel Rohner said in a statement.
“While our exposure is still subject to swings in market conditions, we see market demand for these securities returning in certain areas and at the current level of valuations,” he said.
The bank said it suffered a net outflow of SF12.8 billion in the quarter, compared with a net inflow of SF52.8 billion in the same period last year.
The figure is a closely watched gauge of a bank’s future revenue, not only reflecting general market conditions, but overall customer confidence in the institution as well.