The company announced on Monday that it would write down 4 billion Swiss francs ($3.42 billion) in losses in its fixed income portfolio and elsewhere, resulting in a third-quarter loss of 600-800 million Swiss francs ($514-$685 million), its first quarterly loss in nine years.
Investment bank head Huw Jenkins, who drove a rapid expansion in UBS’ bid to join the top-five investment banking ranks worldwide, will leave along with Group Chief Financial Officer Clive Standish. Marcel Rohner, who was named chief executive in July after the shock exit of CEO Peter Wuffli due to hedge fund losses, will assume control of the investment bank and risk management expert Marco Suter will become chief financial officer.
In a separate announcement, rival bank Credit Suisse said it was also hit by the credit crunch but that it would remain profitable during the third quarter with income from continuing operations after tax hovering round 1.3 billion francs ($1.11 billion).
A meltdown in the U.S. sub-prime mortgage market, sparked by growing defaults on riskier loans, has created a squeeze in credit markets around the world. Despite signs in recent weeks that the credit tightness may be easing, some banks continue to report they are struggling to find cash on wholesale lending markets.