UBS to split wealth management and investment bank
Güncelleme Tarihi:
Swiss bank UBS AG will separate its business into three autonomous units after it identified weaknesses in its integrated one-bank strategy, it said, after posting a worse-than-expected second quarter loss of around $330 million.
The embattled group will separate its prized wealth management business from investment banking, acknowledging flaws in its much-vaunted one-bank strategy, it said on Tuesday.
The move follows continued pressure from investor Olivant to hive off investment banking and comes as UBS racked up further writedowns on battered investments and more losses.
UBS made a bigger-than-expected loss of 358 million Swiss francs ($332 million) in the second quarter. But more importantly, the period was also characterized by heavy money outflows from its business of banking to the world's rich.
Wealth management hemorrhaged 17.3 billion francs while its global asset management had net outflows of 24.5 billion francs.
It also announced it would replace its finance chief Marco Suter with investment banker John Cryan in September, as well as several other changes to the board.
The global markets turmoil has plunged UBS into the worst crisis in its history. As demand for risky mortgages and other debt dried up, the bank has been forced to write down billions of dollars in the value of its investments.
As well as fighting calls for the group's break-up, UBS has also had to defend its conduct throughout the crisis.
MORE JOBS AT RISK
UBS said on Tuesday it did not expect to see any improvement in economic and financial market trends in the second half of the year and said it would continue to cut jobs.
Last week, it agreed to buy back almost $19 billion of bonds after New York State and others sued it for steering clients towards auction-rate securities -- debt which became impossible to sell after the market froze. UBS said this would cost it $900 million.
UBS was expected to post a second-quarter loss of $260 million, according to a Reuters poll conducted before the news of the debt securities buyback.
UBS is also under fire from U.S. congressional investigators, who say the Swiss bank helped United States clients dodge taxes.
Last June, a former UBS banker who once smuggled a client's diamonds into the United States in a toothpaste tube pleaded guilty to helping a billionaire hide $200 million in assets from the taxman.