UBS targets SFr3.4bn further savings UBS announced plans to save SFr3.4bn by 2015 as it confirmed it would dramatically shrink its investment bank, cutting 10,000 jobs in one of the most far-reaching restructurings the industry has seen since the financial crisis. The move, which prompted a SFr2.2bn ($2.4bn) third-quarter loss at the Swiss bank, will leave UBS's operations focused around its wealth management business, supported by a smaller investment bank specialising in equities trading, foreign exchange, precious metals, advisory work and research activities. As the FT reported last week, the investment bank's fixed income operations, which have largely been rendered uneconomic by the tougher capital requirements and subdued market environment, will be split off into a non-core unit and gradually wound down. The unit, which will initially hold risk-weighted assets worth about SFr85bn, will be run by Carsten Kengeter, who will step down from his position on UBS's executive board and his post as co-head of the investment bank, leaving Andrea Orcel in sole charge of the division. Sergio Ermotti, UBS's chief executive, said the decision to embark on the overhaul, which would reduce UBS's staffing levels by a sixth to around 54,000, had been "difficult" but that the move would allow the bank to realise its "full potential." The planned savings come on top of the SFr2bn announced in August last year. UBS's wealth management operations are highly regarded by analysts. However, the investment bank has embroiled UBS in a number of misadventures, from big writedowns in the financial crisis to the largest unauthorised trading loss in British history and the Libor scandal, which caused it to suspend in February some of its most senior traders. The revamp should slash UBS's overall risk-weighted assets from about SFr300bn to below SFr200bn by the end of 2017. The bulk of the reduction will occur at the investment bank, where risk-weighted assets will fall from about SFr160bn to less than SFr70bn. UBS said it expected that the changes, which will take three years to enact, would lead to restructuring charges of SFr3.3bn - including SFr500m in the final quarter of this year, resulting in a net loss for that quarter. The move also hit UBS's third-quarter results. The net loss of SFr2.2bn for the three months to September 30 was down from a net profit of SFr980m in the same period a year earlier. The bulk of the losses in the third quarter came at the investment bank, which made a SFr2.9bn pre-tax loss, due to SFr3.1bn in impairment losses stemming from the unit's impending restructuring. UBS also took a SFr863m charge relating to a change in the theoretical cost of buying back its own debt. Pre-tax profits at the wealth management division came in at SFr600m, up from SFr502m in the preceding quarter, but down from SFr888m in the same period a year earlier. UBS's wealth management operations in the US made pre-tax profits of SFr219m, up 58 per cent year on year, while its retail and corporate banking operations declined 40 per cent over the same period to SFr409m. UBS shares, which closed up more than 7 per cent on Monday, rose a further 5.7 per cent in early Zürich trading to SFr13.87.