Piero Novelli and Rob Karofsky, co-heads of UBS Group AG's investment banking unit, are considering a revamp of the division that could lead to hundreds of job cuts, Bloomberg News reported, citing people familiar with the matter.
A final decision has yet to be made, however, as talks about the move remain at a preliminary stage, the sources said. As of June 30, the unit had 5,333 employees, according to the report.
The investment bank reported volatile results in the past year, and its first-half return on equity of 10% is around half that of the Swiss banking group's other divisions, the news agency noted.
Pretax operating profit at the investment banking division amounted to $427 million in the second quarter, down from the year-ago $535 million, driven by lower operating income from its investor client services and higher operating expenses.
UBS CEO Sergio Ermotti previously said the group will continue to look for ways to redeploy resources in areas where it sees more growth, creating opportunities not only through optimization of financial resources and balance sheet utilization, or costs, but also by further driving the collaboration of the investment bank with other units in the group, particularly with wealth management.