Swiss bank UBS to cut 8,700 jobs

Mr Gruebel told shareholders the outlook remains cautious

Switzerland's biggest bank, UBS, has said it will seek to cut costs by shedding 8,700 jobs by next year.

The news came as the bank announced it had lost about 2bn Swiss francs ($1.75bn; £1.2bn) in the first three months of 2009.

UBS has been one of the biggest banks hit by exposure to the sub-prime loans crisis in the US and ensuing turmoil.

"Unfortunately I am not able, as yet, to offer you any good news," said chief executive Oswald Gruebel.

'Uncertainties'

"Instead I am forced to present you with another round of unsatisfactory performance figures and to announce further drastic measures," he told nearly 5,000 UBS investors attending the bank's annual shareholder meeting.

"Our outlook remains cautious and we face many uncertainties. We have to prepare ourselves for this, even though we are entitled to be very optimistic about the longer-term prospects for our bank," he said.

The bank, which is also being investigated by the US authorities over alleged fraud and tax evasion involving US citizens, said major job cuts were unfortunately unavoidable.

The bank, which employed 76,200 people at the end of March, expects to reduce the number of its employees to about 67,500 in 2010.

The bank is hoping to make savings of 4bn Swiss francs and said the job cuts were "unfortunately unavoidable".

UBS said it will shed 2,500 jobs in Switzerland, and thousands in the US, but did not say how many may be lost in the UK, where it employs 7,000 people.

The job cuts come on top of thousands previously announced and means it will have reduced its workforce by almost a fifth from 83,800 jobs a year ago.

UBS also said that it had seen 7bn Swiss francs of business customers' money leave the bank during the first quarter.

Tax talks

The world financial downturn has already forced UBS to make about $50bn in write-downs and to announce 11,000 job cuts since the middle of 2007.

In late 2008, it transferred billions in toxic debts to a fund owned by the Swiss National Bank to take them off its balance sheet.

Meanwhile, the bank remains embroiled in talks with the US authorities over tax issues.

In February, UBS agreed to pay $780m (£525m) to the US government to settle allegations that it had defrauded US tax authorities.