They are SELLING OFF a DIVISION!
"UBS will split units to improve accountability" by Globe Wire Services | August 13, 2008
Trying to salvage its reputation, the Swiss banking giant UBS disclosed changes yesterday that would separate its struggling investment banking business from the lucrative wealth management operation.
It's called getting rid of dead weight.
The bank's three main units are wealth management, a prized division that focuses on banking for private clients; asset management; and the investment bank, where the brunt of the recent losses at the bank have occurred.
Translation: It's a RICHER'S bank!
Separating the three would give each greater autonomy and "maximum strategic flexibility," UBS said. Some shareholders said the split was intended to facilitate a sale, but the bank's chairman, Peter Kurer, said the businesses were not for sale.
Two weeks from now, watch, they will sell.
The bank, based in Zurich, has come under increasing pressure to make changes, having written down about $43 billion since the mortgage crisis started last summer, making it the European bank hardest hit by the market turmoil. By contrast, Citigroup, based in New York, has recorded more than $56 billion in credit losses and write-downs in the last four quarters, while Merrill Lynch, also based in New York, has marked down more than $45 billion.
Yesterday, UBS reported an additional $5 billion in write-downs on subprime assets and a fourth consecutive quarterly loss.
Also yesterday, JPMorgan Chase & Co. reported a $1.5 billion loss on mortgage-backed assets in less than two months. Trading conditions for the second-biggest US bank by market value "have substantially deteriorated" since July, and "sharply widened" spreads on mortgage-backed securities and loans caused losses, JPMorgan said in a regulatory filing. Financial firms have reported more than $500 billion of losses and write-downs on debt securities since the subprime mortgage market meltdown in 2007.
UBS said splitting the three divisions will make it easier to hold managers and staff directly accountable and "make UBS more effective and agile."
UBS also has been hit by its role in the ongoing auction-rate securities debacle. The bank is one of several that have made arrangements to buy back auction-rate securities and pay fines to several states, including Massachusetts."
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All I see these days when I read banking articles are a bunch of crooks!
