UBS in bonus clawback after investment profits disappear
UBS has launched a major bonus clawback at its struggling investment bank as it continues a round of belt-tightening in the aftermath of an alleged rogue trade.
It has told staff it will take back 50 per cent of share-based bonuses awarded last year to investment bankers whose rewards were more than SFr2m (£1.39m).
UBS had awarded share-based bonuses that were due to vest this year and in 2013 and 2014 but the bank’s compensation rules mean that the board can claw back between 10 and 50 per cent of shares among the top earners if a division records an operating loss.
On Tuesday UBS said its investment bank had been hit by falling revenues in what it called a “lackluster [fourth] quarter”. The division made a pre-tax loss of SFr256m, or SFr186m once gains from its own credit and the trading incident are stripped out.
Among the few “bright spots” at the division were foreign currency trading, short and long-term rates and cash equities in Asia-Pacific.
Investment banks were hit last year as trading and advisory income fell, with clients pulling back from markets due to the Eurozone debt crisis, and stopped doing deals.
UBS is now scaling back its riskier investment banking activities in order to focus on its respected private bank.
A spokesman for UBS declined to say how many employees will be affected by the clawback.
More details are expected to be revealed when the bank posts its annual report on 15 March.