NEW YORK (
said on Thursday that it will downsize several businesses, slash upto 2,000 jobs and step up its focus on wealth management as part of a major overhaul of its investment banking strategy.
The Swiss bank said in an investor presentation that it will attempt to transform itself into an organization that is focused, less complex and less capital-intensive.
"We have chosen to substantially reduce the risk profile of the bank by exiting and downsizing businesses which are not value added to our client franchise or deliver unattractive risk-adjusted returns," said newly appointed CEO Sergio Ermotti in a statement. "We plan to generate a greater share of our profits from businesses that deliver more consistent results and, together with a reduction in risk and tighter cost management, we aim to deliver more attractive returns to our shareholders," he said.
The bank plans to reduce its risk weighted assets in the investment bank by almost 50% to CHF 145 billion. It sees staff at the investment bank declining to 16,500 by the end of 2013 and 16,000 by the end of 2016, compared with about 18,000 currently.
UBS will raise non-dilutive loss-absorbing debt qualifying as capital and is targeting a Basel 3 Tier 1 Common Capital ratio of 13% . It expects to deliver a return on equity to 12% to 17% from 2013.
UBS also intends to pay a small dividend of CHF 0.10 for 2011 and plans to implement a progressive capital return program.
--Written by Shanthi Bharatwaj in New York
>To contact the writer of this article, click here:
>To follow the writer on Twitter, go to
>To submit a news tip, send an email to:
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.