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Bloomberg
As UBS AG (UBSN) prepares to shrink its investment bank following a $2.3 billion loss from unauthorized trading, bankers pushed out or looking to leave may find few opportunities as Wall Street rivals slash jobs.
Switzerland’s biggest bank said on Sept. 24 that its investment bank will carry less risk and use less capital in the future, after the loss by a trader on the Delta One desk in London spurred demands to scale back the division.
“As soon as the news about Delta One came in, CVs from UBS started flying,” said Jason Kennedy, chief executive officer of London-based recruiter the Kennedy Group, using an abbreviation for resumes. “There are some very good people at UBS and they will be in demand. But for many there’s nowhere to go.”
Bloomberg report that even before the trading scandal, Zurich-based UBS had announced plans to cut 3,500 jobs, with 45 percent of those reductions at the investment bank, as market turmoil curbed client activity and rising capital costs made certain businesses less attractive.
The firm now may accelerate that shrinkage, throwing more bankers out of work at a time when European rivals including HSBC Holdings Plc (HSBA), Barclays Plc and Credit Suisse Group AG (CSGN) have announced plans for more than 70,000 cuts.
“Almost certainly you’re going to see more job losses” at UBS, Christopher Wheeler, a Mediobanca SpA analyst in London, said in an interview with Bloomberg Television’s Francine Lacqua. Still, UBS may not face a brain drain, he said. “This is a tough market where most banks are letting people go.”
UBS rose 46 centimes, or 4.3 percent, to 11.09 francs by noon in Swiss trading, trimming the decline this year to 28 percent. The stock has erased all of the losses it suffered in the wake of the trading loss.
The biggest global banks are trimming jobs the fastest since 2008 as companies seek to improve profitability, regulators boost capital requirements and a weakening economy squeezes revenue.
Financial firms have announced more than 120,000 cuts this year, while hiring in some markets or businesses, data compiled by Bloomberg Industries show. London-based HSBC, Europe’s largest bank, said last month it will shed 30,000 workers.
Bank of America Corp., the biggest U.S. lender by assets, said Sept. 12 it also will eliminate 30,000 jobs in the next few years under a project to remove about $5 billion in annual costs.