UBS Makes Record Loss

UBS Makes Record Loss and cuts thousands of jobs – Swiss bank UBS posted the biggest ever annual loss for a Swiss firm on Tuesday and is cutting some 2,000 jobs as it reported reported a 8.1 billion Swiss franc ($7 billion) net loss in the fourth quarter.

UBS’s loss for 2008 came in at 19.7 billion Swiss francs, above analysts’ predictions of 18.7 billion francs.

UBS Makes Record Loss – The quarterly loss came on the back of a hefty 8.8 billion Swiss franc trading loss, as well as charges it made after selling billions in toxic assets to the Swiss National Bank when it was rescued by the State in October. The annual loss was attributed to negative revenues in the fixed income, currencies and commodities area of the Investment Bank.

UBS also announced structural changes to re-focus the bank on its core Swiss businesses, its global wealth management operation and on the growth potential of its onshore business. It is creating two new business divisions: Wealth Management & Swiss Bank alongside the move to cut its staff number to 15,000. The bank had already announced 9,000 job cuts before today.

Chief Executive Officer Marcel Rohner told journalists that the world’s biggest wealth manager was not paying a 2008 dividend but still aims to return to profit in 2009 after seeing some positive signs at the start of the year.

“While we leave a bad year behind us… we can nevertheless report substantial progress,” Rohner said. “Our businesses are well positioned for a challenging future. We had an encouraging start into the new year but the environment will remain difficult and volatile as the real economy has not seen (the) worst yet.”

UBS stock swung sharply in early trade, rising as much as 7 percent before dipping 2 percent to trade at 12.64 Swiss francs by 0910 GMT, broadly in line with a 2.3 percent weaker DJ Stoxx European banking index.

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