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UBS to chop extra 2,000 jobs

UBS AG, Switzerland's largest bank, said yesterday that it plans to eliminate an additional 2,000 jobs at its securities unit and expects to be profitable in 2009, after posting a record loss last year.

UBS rose in Swiss trading after saying its wealth and asset management businesses recorded net increases in client investments in January, following larger-than-estimated withdrawals in the fourth quarter.

Chief Executive Officer Marcel Rohner said that UBS will return to profitability after getting a lifeline from the Swiss government to split off toxic assets. The world's largest manager of money for the wealthy is scaling back risk at the securities unit and seeking to stem defections by rich clients after posting a fourth-quarter loss of 8.1 billion Swiss francs (US$6.9 billion).

"January is a silver lining and so the turnaround looks quite impressive, but the challenge will be to retain that and prevent advisers from taking client assets with them," said Christian Stark, an analyst at Credit Agricole Chevreux in Zurich who rates the stock "underperform." UBS rose 40 centimes, or 3.1 percent, to 13.30 francs by 10:45am in Zurich, valuing the company at 39 billion francs.

The fourth-quarter net loss compares with a deficit of 13 billion francs in the year-earlier period, UBS said in a statement. The loss was wider than the 7.5-billion-franc median estimate of 11 analysts surveyed by Bloomberg News. For the full year, UBS had a record loss of 19.7 billion francs.

UBS eliminated 1,782 jobs during the fourth quarter, with most of the reductions affecting the investment bank. The company intends to lower headcount at the securities unit to 15,000 by the end of the year, after previously saying it would reduce staff to 17,000.

Before yesterday, the bank had announced 9,000 job cuts, exited parts of its debt trading and commodities businesses and raised US$32 billion from investors to offset record losses at the securities unit.


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