Swiss bank UBS is to spin off its investment banking division, which made it Europe's top casualty of the credit crunch and scared off wealthy clients. Analysts said the move signalled the sale of the beleaguered business.
The world's biggest banker to the rich has bowed to shareholder pressure to restructure, admitting there are problems with its one-bank model as it reported fresh writedowns and client withdrawals in the second quarter.
The Swiss bank also ushered in a new financial chief and members of the board in an attempt to rebuild confidence in Switzerland's once-solid banking system.
UBS chairman Peter Kurer told a news conference that rivals were looking for assets they could pick up cheaply in the global market slump, but he said the group was not for sale and had not received any formal offers.
His remarks signify a major change for the bank, which has long stood by its strategy of running asset management, banking for the rich and investment banking together.
UBS said there had been net new money outflows of almost CHF44 billion in the second quarter. It also racked up a further €3.4 billion of writedowns on risky investments.
The bank made a bigger than expected loss of €221m in the second quarter and said finance chief, Marco Suter - an ally of former chairman Marcel Ospel who was toppled in the crisis - would go.
Last week it agreed to buy back almost $19 billion of bonds after US authorities sued it for steering clients towards auction-rate securities - debt which became impossible to sell after the market froze. UBS said this would cost it $900m.
UBS is also under fire from U.S. congressional investigators who say it helped US clients dodge taxes, striking at the heart of Switzerland's prized banking secrecy rules.
