UBS aims to be No.1 in equities trading
ZURICH: UBS wants to regain its top position in equities trading and become a top five fixed-income player as Switzerland's biggest bank pushes to increase the profitability of its investment bank, the division's co-chief was reported as saying on Friday, Reuters Reported.
UBS, which was forced to cut investment banking risktaking after it wrote down more than $50 billion in the credit crisis, forcing it to accept a government bailout, reported a shock investment banking loss in the third quarter on sluggish trading.
The bank, which has hired around 1,000 new staff to bolster its investment banking business potential needed to gain market share in key areas to boost profitability, investment bank co-chief Carsten Kengeter said in an interview with Swiss business magazine Bilanz.
"Currently we are placed third. We have to become number one again. And we will achieve this," Kengeter said, when asked about the banks equities trading business.
The bank also needed to improve on its position outside the top 10 in fixed income trading, he said.
"This business is only interesting from a profit point of view among the top five. We have to get there."
Kengeter told investors in November that UBS was well placed to benefit from an upturn in client activity after hiring new staff, though trading growth would also mean more risk.
UBS is focusing its investment banking activities on the client flow business and away from riskier proprietary trading. New Zealand banks will be an important profit driver for their owners next year for the first time in a decade, UBS says. Profits from the New Zealand divisions of the Australian banks have repeatedly disappointed for years, a UBS report says.
The four big trading banks, ANZ National, ASB, Bank of New Zealand and Westpac reported combined 2010 fullyear profits after tax of $2.2 billion, up 14 per cent on the last year. Despite borrowers focusing on repaying debt, cuts to fixed interest rates should maintain some demand into next year. -PB News