Swiss based investment bank has announced first-quarter losses of CHF2bn, and warned of further cost-saving measures to come.

In a speech by Oswald J. Grübel, group chief executive of UBS, at its annual general meeting (AGM) in Zurich he estimated it will report a loss attributable to shareholders of almost CHF 2bnin first quarter 2009.

He said the loss stemmed from a negative contribution totalling roughly CHF3.9bn due to losses on previously disclosed illiquid risk positions, credit loss expenses and valuation adjustments on the last positions transferred to a fund controlled by the Swiss National Bank. He added that the outlook for remaining risk positions had not changed materially.

To adapt its size to the changed market conditions and lower levels of business, it is planning cost savings by the end of 2010 of approximately CHF 3.5bn to 4bn compared to 2008 levels, which means job cuts from 76,200 people to about 67,500 in 2010, across the world.

He said due to a further reduction of its balance sheet and risk-weighted assets, UBS, despite this quarterly loss, expects to have a tier 1 capital ratio of roughly 10% at the end of March 2009.

However, UBS will close the first quarter with an overall outflow of net new money. Part of this stemmed from the business division Wealth Management & Swiss Bank which recorded a net outflow of approximately CHF 23bn following the announcement of the settlements with US authorities in connection with its investigations into UBS's cross-border services for US private clients.

This was partially offset by Wealth Management Americas which recorded a positive result, with net new money of around CHF 16bn.

As a result UBS announced that going forward it will maintain its core business - international wealth management and the Swiss banking business - alongside its global expertise in investment banking and asset management. But it will continue to reduce risks, and will exit "high-risk and unpromising businesses". The bank said it is currently conducting a review to make clear decisions about which businesses it will remain active in and grow, and which it will exit.

Grübel said: "We know where we have to set to work. It will be a long road back to success without any quick fixes. Rather, we will move forward step by step in a rigorous and disciplined manner."