Swiss bank UBS AG said Tuesday it lost 8.1 billion Swiss francs ($7.57 billion) in the fourth quarter and announced it would cut a further 2,000 jobs as it refocuses on its home market after a troubled year abroad.
The results exceeded the fears of analysts, who on average had predicted net losses of 6.2 billion francs ($5.79 billion).
A year earlier Switzerland's biggest bank had reported a net profit of 1.33 billion francs. The latest results bring its full-year loss to 19.7 billion francs for 2008.
UBS said it plans to refocus on its core activity in Switzerland, its international wealth management franchise, and its global onshore business. To this end it will create two new business units. Wealth management and Swiss bank will be led by Franco Morra and Juerg Zeltner, while wealth management Americas will be led by Marten Hoekstra.
UBS is also shedding 2,000 jobs at its loss-making investment banking unit, which has been blamed for many of the bad investment choices that have seen the bank write down tens of billions of francs (dollars) since mid-2007.
The Zurich-based bank said net new money outflows from its wealth and asset management businesses reached 85.8 billion francs during the fourth quarter.
Staff bonuses
UBS also revealed it will pay staff bonuses of 2.2 billion francs for the year. Further payments of 1.6 billion francs will be delayed until 2010. The bank has been embroiled in a fierce public debate over bonus payments since taking up a $60 billion bailout offer from the Swiss government last year.
UBS announced in November that its chief executive, chairman and the executive board will receive no bonus payments for 2008. Since then several former top officials also have declined or handed back million-dollar payments.
UBS expressed cautious optimism for the coming year, saying that while market conditions remained fragile it had seen positive net new money inflows in January. Net new money is an important indicator of future business in the banking sector.
The bank said it remains the subject of several investigations, including a tax evasion probe in the United States. The Internal Revenue Service has requested that UBS hand over details on U.S. clients suspected of having avoided paying taxes by hiding money in offshore accounts with the bank's knowledge.
UBS warned investors that other countries might follow the lead of U.S. authorities and investigate the bank's cross-border wealth management business.
"It is premature to speculate as to the scope or effect of any such reviews," UBS said.