Believe Ozzy

15 April 2009 By Chris Hughes

Goldman Sachs strong results triggered market euphoria, but UBS is in full crisis mode: 11% of the Swiss bank’s workforce is going amid fresh losses and client outflows. Headcount is going back to 2004 levels. UBS may be a better indicator than Goldman of the industry s future.

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UBS said it was cutting 11% of its global workforce, or 8,700 jobs, and warned of a firstquarter net loss of SFr2bn.

The negative result followed roughly SFr3.9bn of losses on illiquid securities, including SFr300m on the last tranche of assets sold to the badbank scheme run by the Swiss National Bank.

Net outflows in wealth management outside the US were approximately SFr23bn, which UBS said came after settling a probe by US authorities into tax evasion by private clients.

The Tier 1 capital ratio was expected to be about 10% at the end of March 2009, UBS said.

The bank is looking to cut SFr3.5bn to SFr4bn in costs by 2010, taking headcount down from 76,200 at the end of March to 67,500.

Oswald Grübel, who became chief executive in March, said: "We know where we have to set to work. It will be a long road back to success without any quick fixes. Rather, we will move forward step by step in a rigorous and disciplined manner."

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