Last week it was Barclays. This week it seems to be UBS: after a difficult fourth quarter, it seems the Swiss bank may be cutting staff from its London investment banking division.
Insiders say UBS is letting go of people in IBD this week. The number of exits, however, are unclear and may simply be, "trimming." UBS did not immediately respond to a request to comment.
Last week, Barclays cut up 100 "senior bankers" in the UK and said the cuts were "normal pruning," of the kind which generally happens at this time of year (before bonuses are paid). Cuts at UBS would precede bonuses too: anyone let go at this stage will receive no bonus despite working for nearly a full year.
UBS's investment banking division did not have a good 2017. Compared to 2016, M&A revenues were down 8% for the year as a whole and they fell 41% year-on-year in the final quarter. Equity capital markets (ECM) revenues were up 56% at UBS last year, however, and debt capital markets (DCM) revenues were up 6%.
In July 2016, Andrea Orcel, chief executive of UBS's investment bank, said cost cutting was over and subsequently promised to hire senior bankers, particularly in the U.S. market. In 2017, UBS increased headcount across its investment bank by 88 people to a total of 4,822. However, costs rose to 93% of revenues in the three months ending December 2017, suggesting a reduction in headcount might now be a helpful thing after all.
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