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'End of an era' as UBS slashes investment arm

Swiss bank UBS has effectively ceased to trade as an investments giant, following an announcement from its chief executive.

Speaking to shareholders in Basle at the firm's annual general meeting, Mr Rohner said that the enormous financial fallout suffered by UBS in recent months necessitates the downsizing.

In total, UBS has written off $37.4 billion in products related to the sub-prime market - whose collapse in the US last summer triggered the ongoing credit crunch.

"We no longer aim to offer everything to everyone - we don't need an oversized balance sheet," Mr Rohner commented.

"We don't need an oversized investor of trading portfolios - and we don't need an unnecessary concentration of risk."

The chief executive's speech also included a potentially humiliating admission that risk management practices at the bank prior to the credit crunch, which allowed heavy exposure to sub-prime products, were inadequate.

"The far-reaching consequences of our misjudgment have already taken hold and we cannot turn back the clock," he said.

At the meeting, the 4,000 UBS shareholders present voted to allow a rights issue worth over $15 billion - which will dilute the value of shares, but will also go some way to restoring the bank's balance sheet.