UBS Downsizing RE, Securitization

UBS said Friday that it will "substantially downsize real estate and securitization" as part of a "repositioning" of its investment bank. "UBS has already taken a number of actions to reduce its balance sheet, implement a new market-based funding model, and reduce risk and headcount," the company said. "Today's announcement will lead to further reductions, with the aim of bringing the cost base to a more sustainable level." In total, UBS said its investment bank "will reduce net headcount by an additional 2,000, bringing staffing levels to approximately 17,000 by year-end, a reduction of around 6,000 since the peak in third-quarter 2007." It added that the reductions "will be predominantly targeted to businesses being exited or downsized in order to protect and sustain our core client franchises." The company had said Thursday that it has been making progress reducing its problematic mortgage-related exposures and has estimated that it will produce a small profit in the third quarter.