Bloomberg reports that UBS intends to split off and wind down much of its fixed- income operations, reducing risk-weighted assets by an additional $107bn, said a person with knowledge of the matter who requested anonymity because the plans are private. The revamp stands to help Zurich- based UBS meet capital goals faster than it would otherwise.
Chief Executive Officer Sergio Ermotti is overhauling the bank as Swiss regulators pressure UBS and Credit Suisse Group AG (CSGN) to boost capital and scale back trading and investment-banking operations. Ermotti, 52, said in July that once the bank reaches its capital targets under Basel III rules, UBS plans to 'implement a policy of returning capital to our shareholders in different forms'. The bank paid its first cash dividend in five years for 2011, amounting to 10 centimes a share.
'UBS is going back to its roots', said Kian Abouhossein, a London-based analyst at JPMorgan. 'UBS is in fact the easiest restructuring story besides Credit Suisse by closing most of fixed income, cutting back-office costs, freeing up capital and becoming even more wealth-management geared'.
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