UBS Announces Revamp of Investment Banking Division

Zurich–Swiss bank UBS, headquartered in Zurich, will overhaul its investment banking business because of massive U.S. subprime mortgage-related losses, reported Friday.In an internal memo, Chief Executive Marcel Rohner said the bank could cut jobs and will decrease its riskier strategies, which included ceasing its U.S. proprietary credit operations.UBS’ credit market business will be reduced and the bank has formed a real estate ” workout group” that will gather the bank’s mortgage-backed securities and credit default obligations, along with UBS’ asset-backed securities.”This team will be primarily responsible for developing exit strategies for our existing portfolio through market alternatives and innovative structured solutions,” Rohner said. “Our aim is to reduce exposure to this asset class in an orderly manner while minimizing further downside risk.”UBS already has written off about $14 billion in debts connected with subprime loans; analysts feel the bank may see more.