UBS investment banking headcount could fall to 10-12k

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This is not the official UBS policy announced in Oswald Grubel's speech today. But according to one analyst covering UBS, it is a distinct possibility.

"So far, UBS haven't cut many more investment banking staff than their rivals," says Peter Thorne, analyst at Helvea. "Their investment banking headcount was around 22,000 at the peak and it's now down to 17,000. I've got it going down to 15,000 and it could easily fall to 10-12,000," he adds.

Grubel clarified current cost cutting plans for the investment bank in a speech at the bank's AGM, saying -

We will build on our already strong positions in equities and foreign exchange as well as in the corporate finance and M&A business. At the same time we will continue to reduce our balance sheet and risk-weighted assets. We want to focus our trading activities on client business. Across all parts of the Investment Bank we will be exiting certain areas of activity completely and reducing risks. We will concentrate on the most important capital markets, and withdraw from certain locations.

Thorne says this means anything that's not client facing or low risk in the investment bank will be up for removal.

The crunch point will come if Grubel's plans to cut costs by consolidating corporate services across the group fail to reverse recent losses.

Analysts at Keefe, Bruyette & Woods predict that cost cutting will negatively impact revenues: "With a cautious outlook, it remains hard to know when UBS will return to profitability."