UBS reduces manpower in debt syndicate

As part of the latest round of lay-offs announced by UBS this week, Samuel Chan has left its Asia debt syndicate, effectively halving the capacity on the desk. One source said Chan volunteered to leave. According to several other sources, the bank has also laid off what is being referred to as a small number of bankers from its debt capital markets team as well as a larger group of people across fixed income, currencies and commodities.

The layoffs took place last week, but people familiar with the process say the job cuts were part of the headcount reduction flagged by UBS in connection with its fourth quarter earnings presentation on Tuesday. In the earnings statement, the Swiss bank said it will trim the headcount within the investment bank by another 2,000 people to 15,000 by the end of 2009 from around 17,000 at present. UBS has earlier announced that it is exiting a number of fixed-income businesses including proprietary trading, some commodities businesses, real estate and securitisation, as well as exotic structured products.

While it is unclear how many of these job cuts will be in Asia, last week's layoffs were quite small in terms of numbers so it seems likely there could be more to come. The Swiss bank let go of 1,782 people during the fourth quarter of 2008, mostly in investment banking, which was marginally less than the 2,000 people it had announced it would reduce in early October last year.

Chan, who was a director, had several years of experience on UBS's debt syndicate desk which has been led by Fergus Edwards since September 2007 when the previous head took on a new role as head of hedge fund coverage for Asia. Following Chan's departure, Edwards will run UBS's debt syndicate as a one-man team.

UBS ranked tenth in G3 bond issuance in Asia in 2008 with a 4.7% market share, according to Dealogic. It was third in the high-yield segment after helping to arrange one of only three non-investment grade corporate issues last year -- the $350 million five-year deal for SM Investments in the Philippines. But UBS also made a significant breakthrough in China's domestic bond market during the course of last year, helping to bring several sizeable renminbi-denominated bonds to market and pushing its way into the third spot in the league table for domestic Chinese debt -- behind two local investment banks.

UBS posted a net loss of SFr19.7 billion ($16.8 billion) for 2008, up 375% from the 2007 loss of SFr5.2 billion, with the fourth-quarter shortfall alone coming to SFr8.1 billion. It blamed the poor performance mainly on negative revenues in the fixed income, currencies and commodities areas of the investment bank. The pre-tax loss in the investment banking division doubled to SFr33.7 billion in 2008 from SFr16.7 in 2007, despite a reduction in personnel expenses from SFr11.3 billion to SFr4.9 billion.