UBS AG scales back investment bank

The biggest-by-assets Switzerland bank UBS AG has recently unveiled its much-anticipated plans for significantly scaling back its investment bank --- a strategic reduction that will witness the shedding of waning businesses, and mark the UBS’ return to its roots with key focus on its gigantic private bank.

It is being reported that UBS will apparently bring about a 50 percent reduction in its risk-weighted assets at its investment bank for the coming five-year period. In addition, the bank will also slash nearly 2,000 posts at the investment division, as well as restructure the division in such a way that it can serve up an increasing number of services and products to the private bank’s ultra-rich customers.

The mentioned moves will help raise the overall return on equity of UBS to somewhere in the range of 12 percent and 17 percent in 2016.

The turnaround strategy was recently outlined by beleaguered Swiss bank’s new chief Sergio Ermotti at his first investor day after assuming the CEO’s role. Ermotti said that the bank’s weak businesses units will be shrunk, and that efforts will continue towards the direction of bolstering the capital levels at the bank.

Further adding that he is also looking for ways to increase the bank’s return on equity by several percentage points, to mark its return to profits, Ermotti said that even though the bank is aware that its goals are “ambitious,” the success of the turnaround strategy will be judged by “our ability to execute.”