UBS cuts jobs in equity markets as revenues fall

(Bloomberg) – UBS Group AG is laying off equity capital markets bankers due to a sharp drop in revenue after a slowdown in industry transactions, according to people familiar with the matter.

The Swiss company this month began laying off a handful of equity and capital market bankers in Europe, the Middle East and Africa, the sources said, asking not to be identified as details do not are not public. Equity offerings in the region are on track to plunge around 70% this quarter and face an even steeper decline in the US

Investment banks battled to retain talent in mergers and capital markets in a booming market last year, with global deal closing hitting a record $5 trillion . While it’s not uncommon for banks to lay off staff at this time of year, the cuts could signal the end of the talent war. This year has seen activity fall as businesses and investors become more risk averse due to concerns over the war in Ukraine and tighter monetary policy.

The Zurich-based bank has also cut investment banking jobs in emerging markets, including Dubai and Poland, as it seeks to cut costs, the sources said. More bankers could be laid off in the coming weeks, the people said.

Investment banking revenue in Europe is expected to fall more than 30% this quarter as sentiment weighed by the war and the start of rate hikes, while corporates also benefited from buoyant conditions in the same period l last year.

Debt capital markets and mergers and acquisitions are also expected to see a sharp decline in revenue, the sources said. Still, some rival bank executives said they were actively monitoring the situation to decide whether to cut staff and had yet to decide, some people said.

UBS also pulled out of its investment banking business in South Africa and India, Bloomberg reported in December. The investment bank’s current pullback into emerging markets comes as it continues to grow and invest in its wealth management business in these regions.

UBS Middle East investment banking head Michael Cleanis is set to join Abu Dhabi wealth fund Mubadala Investment Co., Bloomberg reported. Cleanis has worked for the bank in Dubai for 12 years. UBS also cut its investment bank in South Africa, Bloomberg reported in December, while Pawel Dela, head of investment banking in Poland, joined Morgan Stanley late last year, according to his LinkedIn profile.

©2022 Bloomberg LP