Switzerland

Switzerland’s UBS plans another shake-up of its investment banking arm to help boost earnings and curb costs after tough market conditions precipitated a performance dip, Reuters reported. The world’s largest investment banks have had their worst start to a year since 2006, the latest data published by industry analyst Coalition on Thursday shows. “What’s been communicated today was a reorganisation, which did not include a specific number of job cuts,” a person familiar with the matter said, adding that the restructuring would be carried out by the end of the year.

The global trade dispute and travails of Germany’s car industry have begun leaving their mark on Swiss industry, with chemicals-specialist EMS-Chemie Holding AG citing the fallout this week, joining a number of other companies across the region, Bloomberg News reported. The euro area is Switzerland’s top trading partner, and Swiss exports to the southern German state of Baden Wuerttemberg exceed those to China. The bloc’s economy is in the throes of a slowdown that could yet get worse and Germany is possibly on the verge of a recession.

Switzerland’s thrift, contrasting with neighbors struggling to fix bloated budget deficits, is exposing the country to other longer-term problems, Bloomberg News reported. The country of 8 million runs surpluses every year and its debt ratio is far below a level that would even begin to raise alarm bells. In fact, critics warn that the aversion to leverage risks making life harder than necessary, with wide-ranging economic implications. It looks like a model of fiscal prudence in a world drowning in debt.

This time last year Sergio Ermotti was riding high. The UBS chief executive was basking in a double-digit jump in quarterly profit and boasting of the bank’s “excellent” prospects. His decision six years earlier to refocus on wealth management and slim down the investment bank looked to be paying off — the model he pioneered was copied by Credit Suisse and Morgan Stanley.  A year on and the narrative is very different, the Financial Times reported.

Credit Suisse Group AG’s recent shareholder meeting took an awkward turn when a Mozambican activist questioned Chairman Urs Rohner over the bank’s role in fraudulent deals that saddled her country with $2 billion of debt, The Wall Street Journal reported. The confrontation halfway through Friday’s meeting was the latest example of the rising international pressure on Credit Suisse to forgive loans it made to Mozambican state-owned companies engaged in an alleged complex fraud, and potentially, to pay damages to victims.

GAM moved closer to drawing a line under the problems that have engulfed the Swiss fund manager with a deal to sell about £600m of bonds that will complete the liquidation of funds at the heart of its crisis, the Financial Times reported. The news from the Zurich-based group sent its shares up 14 per cent on Wednesday. It stunned the market last summer when it suspended Tim Haywood, a London-based investment director who oversaw the group’s SFr11bn absolute return bond funds (ARBF).

For investors trying to make sense of recent extreme moves in the global credit market, bad news: The roller coaster may go on. The long-feared liquidity menace is well and truly here, and it’s overshadowing more prosaic factors like low default rates and corporate earnings when turbulence in the $13 trillion market erupts, according to new research from UBS Group AG, Bloomberg News reported. “Dizzying” moves of late have been driven by rapidly rising and falling liquidity, strategists at the bank argued this week.

Credit Suisse Group AG’s three-year turnaround ended with more of a whimper than a bang after trading losses eroded gains in wealth management and investment banking. The Global Markets business posted a larger-than-expected loss of 193 million francs ($191 million) in the fourth quarter, offsetting wealth management and investment banking results that beat estimates, Bloomberg News reported. In a tough quarter for money managers, the Zurich-based bank bucked a trend of large outflows at rivals, adding about half a billion francs of net new money.

Puma Energy, the retail and storage arm of commodities trader Trafigura, plans to restructure and sell assets to cut its debt and improve profits, a source familiar with the matter said, Reuters reported. Puma has hired consulting firm McKinsey under new chief executive Emma Fitzgerald who took over last month from Pierre Eladari, who had overseen rapid expansion, the source said. Although its full-year 2018 results have not been finalised, Puma expects a small net loss or profit, the source added.

Airopack’s recapitalization plan collapsed as lenders including Apollo Global Management demanded repayment following the discovery of “inadequate sales and accounting practices”, the Swiss aerosol packaging maker said on Monday, Reuters reported. Shares in the company, which makes plastic aerosol dispensers for Procter & Gamble’s Gillette shaving cream, fell as much as 60 percent and have lost almost all their value since hitting 13.5 Swiss francs ($13.46) three years ago.