Is UBS investment bank becoming an appealing place to be?

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If you wait long enough, everything apparently comes back into fashion. Could this now be said of UBS?

The erstwhile Swiss disaster-bank and writer down of more assets than any other institution in Europe, is arguably looking a little more alluring in the light of the US 90% bonus tax proposals.

It helps that UBS got rid of all of its toxic assets way back in October. And last week it announced plans to buy back $1.3bn of subordinated bonds to boost its balance sheet, a move expected to make a profit of €280m ($383m).

But while Deutsche Bank is going all out to scoop up investment banking talent, UBS appears to be holding firm on its promise to scale down its investment banking aspirations and hasn't publicly hired anyone.

Instead, it's lost a succession of staff over the past month, including the co-head of its European bond syndicate, the co-head of German investment banking and senior members of its natural resources group. UBS is also implementing an eight year equity lock in for its directors.

An analyst at one European bank says UBS's investment bank remains a difficult place to be. "Like most private banks and asset managers, they haven't adjusted to the 40% collapse in equity markets and are still overstaffed. Morale is very low."

He adds that the real appeal of UBS will be measured by the success of Geithner's plan, due to be announced this afternoon. If it succeeds, this could relieve US banks of their troublesome assets too.

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