Morning:
22°c
Shareholder anger over executive pay boiled over when investors holding a hefty 42% of the stock refused to back Tesco's decision to make its share option plan even more generous
More...
Swiss bank UBS today said it expects a small profit in the third quarter as it prepares to shed another 2,000 jobs, or 10% of its investment banking workforce. The bank also said 2009 will be an overall profitable year.
New chairman Peter Kurer told a shareholders' meeting in Basel that not only did UBS estimate a small profit in the third quarter, it had also "substantially reduced its US commercial and residential mortgage-related positions, mainly through disposals".
He gave no details of the latest write-downs or current exposures. UBS has been the worst-hit European bank in the credit crunch, with four successive quarterly losses and writedowns totalling $36.7 billion (£20.7 billion).
Analysts expect a further writedown of up to Swfr3.3 billion (£1.65 billion) when UBS reports third-quarter numbers next month. Dresdner Kleinwort forecasts net profit of Swfr775 million.
Kurer described the latest quarter as one of "extremely volatile conditions."
But he said changes he has brought in since the annual meeting in April have made UBS a "model of clarity and accountability."
He is expected to give further details today of his restructuring plan, which was first unveiled in August.
Ahead of the meeting, he said the bank had "created three autonomous business divisions and vested them with increased operational authority and accountability".
Part of that change was in effect to ring-fence the investment bank which held almost all the toxic debts and loans. That in turn has forced massive cuts, with 4000 jobs taken out in the investment bank since the credit crisis began, and another 2000 expected to go in the short term.
UBS employs almost 7000 people at its investment bank headquarters in Broadgate. In the past the major job cuts have come in the United States, where most of the bad loans originated, and in the fixed income department.
This time cuts are set to be spread more broadly across regions and sectors.
In a statement the bank said: "UBS, at all times, wants to maintain a strong capital base, adequate liquidity and a reduced, solid balance sheet."
Kurer told shareholders that the bank had learned from past mistakes, made key personnel changes and had significantly changed the way that it measures and evaluates risk.
