ZURICH, Oct 30: Swiss banking giant UBS on Tuesday announced nearly 10,000 job cuts and a third quarter bathed in red due to a massive restructuring of its ailing investment bank, in the latest blow to a Swiss banking sector under fire.

The Zurich-based bank confirmed rife speculation in recent weeks that large-scale lay-offs were in store, saying it would trim its overall staff numbers to about 54,000 by 2015 from the 63,745 it counted at the end of September as part of a large-scale overhaul of its investment bank.

That restructuring also carried a steep price tag, the bank said, as it blamed charges generated by the operation for a 2.2-billion Swiss franc (1.8-billion euro) net loss in the third quarter. The UBS had posted a 1.0-billion franc profit in the same period a year earlier. Analysts polled by financial agency AWP had expected the bank to pull in a net profit of 430 million francs this time around.

The worse-than-expected result did not dampen traders’ response to news of the restructuring, however and UBS’ share price gained 5.11 per cent in afternoon trades, while the Swiss stock market was up by 0.58 per cent overall.

The UBS chief executive Sergio Ermotti said the call to let so many bank employees go had been tough. “This decision has been a difficult one, particularly in a business such as ours that is all about its people,” he said in a statement.

UBS, which had already announced 5,500 job cuts last year, would focus the latest round on London and New York, Ermotti told reporters, adding that 2,500 jobs would also be shed in Switzerland. The bank insisted the cuts were a necessary part of an ongoing restructuring of its investment bank, including shedding some high-risk activities and basically withdrawing from the fixed income business which had burdened it with catastrophic losses during the 2008 “subprime” crisis.

The UBS’s investment bank has been struggling to get back on its feet ever since, but has run into a number of stumbling blocks along the way. Last year, it emerged that one of its traders in London, Kweku Adoboli, had lost $2.3 billion of the bank’s money.

The UBS, like other Swiss banks, has also faced rising pressure over the country’s cherished bank secrecy laws.—AFP