CHICAGO, Oct. 30, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include UBS AG (NYSE: UBS), Deutsche Bank AG (NYSE: DB), Royal Bank of Scotland Group Plc. (NYSE: RBS), Credit Suisse Group AG (NYSE: CS) and Citigroup Inc. (NYSE: C).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday's Analyst Blog:
UBS Contemplates 10,000 Layoffs
UBS AG (NYSE: UBS) is likely to make 10,000 job cuts, according to a report in the Financial Times. The layoffs are part of the company's efforts to reorganize its business and split its investment bank. The details are expected to come up this week.
According to the report, UBS will pool a significant part of its fixed income trading business into a non-core unit, which would be led by Carsten Kengeter, a co-head of the investment bank. In due course, this unit would be wound down. As a result, the investment bank unit would shrink and be comprised of equities trading, foreign exchange and advisory activities.
The layoffs represent around one-sixth of the company's total staff strength as of June 2012. It is also over and above the 3,500 job cuts program which was announced last year and is currently underway. The layoffs will take place in a phased manner.
The layoffs, designed by Chief Executive Sergio Ermotti, would lead to a decrease in risk-weighted assets and lessen the complexity of its investment banking division. Thousands of back office operations will be reduced and therefore the costs associated with such support activities will be lessened.
With UBS facing crises since the financial meltdown, besides incurring trading losses and outrage worth billions of dollars, the overhauling measures are aimed at developing its core businesses and downsizing its troubled units. The company has been trimming its investment bank unit over the past year and aims to refocus on building its market-leading wealth management and asset management business.
UBS, which is scheduled to report its earnings tomorrow, is not the only firm that is overhauling its business and making job cuts. Amidst the stressed operating environment, lower returns and stringent capital norms, other banks are rightsizing their business to meet such challenges.
In the recent months, Deutsche Bank AG (NYSE: DB) also announced its plans of revamping its business, which involves change in compensation practices, job cuts as well as asset sales. Moreover, Royal Bank of Scotland Group Plc. (NYSE: RBS) and Credit Suisse Group AG (NYSE: CS) have opted to make layoffs to address such issues. A number of U.S. banks like Citigroup Inc. (NYSE: C) also chose business restructuring post the financial crisis.
Given the stressed operating environment, we believe any significant improvement in the earnings of UBS would remain elusive in the upcoming quarters. However, prudent business model changes can lead to improvement in efficiency and bolster its competitive edge.
UBS currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.