UBS to slash pay and bonuses
Beleaguered bank UBS last night admitted it was planning on slashing its salary and bonus budget by billions of dollars, as it struggles to cope with the effects of the credit crunch.
But a spokesman said that reports in Swiss newspaper Sonntag claiming that the payroll budget would be cut by $4bn were exaggerated, pointing out that bonuses were not calculated until the end of the calendar year.
“We have five months to go until bonuses are decided so it’s impossible to calculate them now. But it will be worse than last year.
“Whether it will be $4bn less or not, we just don’t know. If you cut thousands of jobs, the wage bill will obviously go down, but $4bn seems a bit high,” he said.
The bank, which was Europe’s biggest casualty of the US credit crisis, has had to write down $43bn since the start of the crunch due to the decline in investment banking, one of its core businesses.
More than 2,600 staff have left the investment banking arm of UBS in the last year, around 12 per cent of its total workforce.
In the second quarter alone, the division cut its headcount by around 1,700 reducing the total number of staff to 19,475. It is hoping to shed a further 500 jobs before the end of the year.
The bank made salary payments, or set aside bonuses of SFr7.76bn ($7bn), in the first six months of this year, far less than the SFr11.7bn in the same period in 2007 and the lowest figure since 2003.