UBS has reported a week performance in its third-quarter this Tuesday, with the multinational bank recording a 16.3 percent drop in net profit when measured against the same period of the previous year.
In particular, net profit was $1.049 billion for the third quarter of this year, in comparison to $1.253 billion in Q3 of 2018. Operating income also fell by 4.6 percent, from $7.428 billion in the third quarter of last year, down to $7.088 in the most recent period.
Furthermore, the company also reported a 62 percent slump in its investment banking unit due to a “challenging environment.” Specifically, profit before tax for UBS’ investment bank came in at $172 million, down from $453 million year-on-year.
Job cuts are on the way for UBS
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Because of the nasty quarter, UBS is looking to restructure its business in the fourth quarter of this year. In a call this morning, the CEO of UBS, Sergio Ermotti, said he was displeased with the investment bank’s performance.
“We are not satisfied with the investment bank’s financial performance this quarter. We are implementing a number of actions to evolve our business model.”
Namely, the bank expects to take restructuring expenses of $100 million – a process that will lead to job cuts, according to a report from eFinancialCareers. Specifically, around 170 layoffs will need to be made in order to reach its target.
According to the company’s CFO Kirk Gardner, the CHF 90 million reductions in costs really are 90 percent personnel costs, and the job cuts will mostly impact “senior staff.” Furthermore, the CHF 90 million figure includes additional investments in electronic trading and technology plus extra spending on controls due to “regulatory headwinds.”