Bonus Cuts
The bank notified about 1,900 employees of redundancies in the fourth quarter, Naratil said. Group headcount fell by 1,117 to 62,628 employees in the quarter, including a reduction of 789 at the investment bank.
More than half of the planned 10,000 job cuts will be at the investment bank, and the reorganization at UBS will result in charges of 3.3 billion francs over the next three years, the bank said in October.
UBS’s bonus pool, including pay that is being deferred into future years, was cut 7 percent to 2.5 billion francs in 2012, the bank said. Part of the bonuses will be paid in contingent capital bonds, which will be written off if UBS’s common equity ratio falls below 7 percent or the bank faces a bailout.
UBS was fined about 1.4 billion francs in December by regulators in the U.S., U.K. and Switzerland for altering its submissions used to set benchmarks such as the London interbank offered rate. The fine was triple the penalties levied against Barclays Plc, which had to pay 290 million pounds ($457 million) in June.
Trading Loss
Libor, a benchmark for more than $300 trillion of financial products worldwide, is derived from a survey of banks conducted each day on behalf of the British Bankers’ Association in London. Lenders are asked how much it would cost them to borrow from one another for 15 different periods, from overnight to one year, in currencies including dollars, euros, yen and francs.
The bank was also fined 29.7 million pounds in November by the U.K.’s Financial Services Authority and told by the Swiss regulator it may have to increase capital levels for operational risks after a $2.3 billion loss from unauthorized trading by Kweku Adoboli. The former trader in UBS’s London office was sentenced to seven years in jail on Nov. 20 for fraud in relation to the loss, the largest from unauthorized trading in British history.
Deutsche Bank AG, Germany’s biggest bank, last week reported a 2.17 billion-euro ($2.94 billion) loss for the fourth quarter on costs related to deleveraging, cutting jobs and setting aside 1 billion euros for legal expenses.
Bloomberg
