Investment banking enduring worst quarter 'in recent history' - UBS
By Abigail Townsend
Date: Wednesday 20 Mar 2019
(Sharecast News) - The chief executive of UBS has called the last three months one of the worst quarters in investment banking's recent history.
Addressing an investment conference in London, Sergio Ermotti said UBS was planning on cutting an extra $300m of costs in the current year, primarily through a slowdown in hiring, after its investment banking arm endured a torrid three months.
According to reports, Ermotti said revenues at the division were down by around a third compared to the first quarter of 2018. "We've seen some improvement lately but it remains patchy, and not enough to offset the challenging start to the year," he said.
Switzerland's biggest bank now expects to achieve mid-single digit adjusted returns on attributed equity for the first quarter, compared to 12.6% in the same period a year ago.
Ermotti told the conference: "While clearly not in line with our long-term aspirations, I find it to be acceptable outcome if it is a one-off in one of the worst first quarter environments in recent history."
Investment banks are struggling as they seek to navigate volatile markets and a weakening global economy. In January, UBS missed analyst expectations for the fourth quarter, after nervous clients at its core wealth management arm withdrew from turbulent markets and the investment banking unit endured "challenging market conditions".
Shares in UBS fell on Wednesday, and by 1430 GMT they were down 3%. Fellow European bank Credit Suisse lost 4% while Deutsche Bank, which is in merger talks with smaller rival Commerzbank, was off 3%.
UBS is scheduled to post first-quarter numbers at the end of April.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN