UBS to split wealth management and investment bank

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The embattled group will separate its prized wealth management business from investment banking, acknowledging flaws in its much-vaunted one-bank strategy, it said on Tuesday.

The move follows continued pressure from investor Olivant to hive off investment banking and comes as UBS racked up further writedowns on battered investments and more losses.

UBS made a bigger-than-expected loss of 358 million Swiss francs (174 million pounds) in the second quarter. But more importantly, the period was also characterised by heavy money outflows from its business of banking to the world's rich.

Wealth management haemorrhaged 17.3 billion francs while its global asset management had net outflows of 24.5 billion francs.

It also announced it would replace its finance chief Marco Suter with investment banker John Cryan in September, as well as several other changes to the board.

The global markets turmoil has plunged UBS into the worst crisis in its history. As demand for risky mortgages and other debt dried up, the bank has been forced to write down billions of dollars in the value of its investments.

As well as fighting calls for the group's break-up, UBS has also had to defend its conduct throughout the crisis.

MORE JOBS AT RISK

UBS said on Tuesday it did not expect to see any improvement in economic and financial market trends in the second half of the year and said it would continue to cut jobs.

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