ZURICH: Swiss bank UBS is axing high-paying investment banking staff after a disappointing performance at the division prompted a 16per cent slide in third-quarter net profit and put the group's 2019 profit goals further out of reach.
Ermotti is running up against a number of headwinds in UBS's core markets, as wealthy clients hold back from trading, negative rates eat into margins and investment banking activity remains muted. In its investment bank a fall in M&A work meant its advisory revenue fell 21per cent, while equity and debt capital markets income were down 22per cent and 15per cent respectively. On the trading side equities revenue fell 7per cent, while foreign exchange, rates and credit revenue was steadier with just a 1per cent fall.
While the group last year announced targets for a 15per cent return on common equity for the year and a 77per cent adjusted cost/income ratio, Ermotti in March hinted the bank faced a steep climb to attain the profitability increase implied by the targets.
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