Monday, August 25, 2008

UBS to cut bonus payments

ZURICH - UBS plans to cut first half bonus payments to its employees by 4 billion Swiss francs (S$5.14 billion), Swiss newspaper Sonntag CH reported on Sunday without disclosing its sources.

For 2007, the bank had paid in total 12 billion Swiss francs in bonuses despite substantial writedowns and a capital hike caused by the subprime crisis.

A spokesman for the Swiss bank declined to comment on the report but said that bonus payments will 'certainly be lower'.

The cutbacks will mainly affect UBS' investment banking and asset management staff, the newspaper said.

In total UBS reduced staff costs by 5 billion Swiss francs during the first half, as the troubled Swiss bank cuts its headcount by 5,500.

The decision does not come as a surprise in the wake of the investment banking unit's 23.5 billion Swiss franc loss, the newspaper said.

UBS had announced earlier this month that it will separate its loss-making investment bank from its prized wealth management arm, resulting also in a new bonus system.

According to the bank's new plans, bonus payments will no longer be calculated based on the group's overall results but individual segments' performances. -- REUTERS

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