UBS AG’s (UBS) U.S. based brokerage unit – UBS Wealth Americas – is eliminating around 75 sales assistants, per a Reuters report. This is a part of the company’s existing cost-containment plan.
The layoff process, which began approximately a week ago, is presently underway. The concerned employees serve as client service associates for around 7,000 financial advisers of the firm. Aiding the productivity of brokers, they are responsible for handling customer inquiries and documentation work. Among them, some get remuneration directly from advisers while the firm compensates others.
Amid several litigation issues and internal inefficiencies, the Swiss banking giant is striving hard through restructuring initiatives that focus on building capital levels to achieve operational efficiency and reduce risk-weighted assets (RWAs).
Last month, UBS AG reported decent second-quarter 2014 results. Driven by prudent expense management, the company’s net income attributable to shareholders stood at CHF 792 million ($890.8 million), up from the prior-year quarter earnings of CHF 690 million ($731.8 million). Operating expenses decreased 7.8% year over year to CHF 5.9 billion ($6.6 billion).
In its second-quarter earnings release, UBS AG mentioned that the absence of steady improvements related to unresolved European economic problems, U.S. fiscal and monetary issues and the ongoing global concerns, as well as the uncertainty at large and seasonality, could impact the client activity levels and trading volumes. However, with the execution of its strategies, the company expects to generate sustainable returns for shareholders.
UBS AG currently holds a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the foreign banks space include Argentina-based BBVA Banco Franc (BFR), Brazil’s Itau Unibanco Holding SA (ITUB) and South Korea-based KB Financial Group, Inc. (KB). All these stocks sport a Zacks Rank #1 (Strong Buy).
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