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UBS cuts jobs, shrinks operations

UBS is set to close down a US principle finance unit and halve one of its divisions as it pulls out of risky investments.

Europe's biggest bank is shutting an operation making bets on fixed-income investments and will cut the jobs of half of the staff who dealt in mortgage-related securities as compared to its peak employment last August.

This news comes after the Zurich-based bank was forced to write down its sub-prime mortgage investment portfolio by $14.7 billion last year.

According to the Financial Times, UBS' chief executive officer, Marcel Rohner, told employees the news in a note.

He also informed them that the bank would cut its capital investment in real estate by two-thirds as well as appointing a new risk manager.

Regarding the fixed-income unit, Mr Rohner wrote: "We will continue to examine and refine our strategy, with the objective of improving efficiency and returning the area to profitability."

He confirmed that the move was "in line with the investment bank's strategy to reduce risk concentration and balance sheet utilization''.

Shares in UBS fell by a further 0.6 per cent in early afternoon trading following the news, adding to the 41 per cent decline they have seen in the past 12 months.