Swiss financial giant UBS AG on Tuesday reported a loss of almost 20 billion Swiss francs ($21.08 billion) for 2008, a fourth quarter loss of CHF 8.1 billion, and further restructuring efforts.

The firm said that the net loss of CHF 19.7 billion for full-year 2008 was primarily due to losses on risk positions in its investment bank division. Lower asset totals also drove reductions in revenue and profit from its wealth management & business banking and global asset management businesses in 2008. In the fourth quarter, excluding certain substantial items, adjusted net operating results were negative CHF 2.8 billion, as it saw net outflows of CHF 58.2 billion from global wealth management & business banking group and CHF 27.6 billion from global asset management.

In its latest restructuring move, UBS said that it will create two new business divisions: wealth management & Swiss banking, and wealth management Americas. “The new structure re-focuses UBS on its Swiss core businesses, on the large scale and strengths of its international wealth management franchise in Switzerland, and on the growth potential of its on-shore business globally,” it explained.

Also, while investment banking will remain a core business of UBS it plans to cut another 2,000 jobs in this division by the end of the year, leaving it with about 15,000 employees (this does not include staff who will be managing positions from businesses that UBS is exiting).

The firm says that it has already implemented far-reaching changes in its fixed income business. It has exited institutional municipal securities, proprietary trading, commodities (excluding precious metals, ETD and indices) and real estate & securitization activities as well as exotic structured products.

“We are focusing on our three core businesses: our investment banking department and equities activities, with their very strong global franchises, as well as our client-facing fixed income areas, including our world class foreign exchange business,” Jerker Johansson, CEO of the Investment Bank, explained. “Our number one priority is to be profitable in 2009.”

Marcel Rohner, CEO of UBS, said, “The conditions for the financial industry have changed and will remain different for the foreseeable future. We have adjusted our businesses such that they are best positioned to be profitable and to grow sustainable earnings in a new environment.”

Looking ahead, UBS said it has had an encouraging start to the year, and net new money was positive in January in both wealth management and asset management businesses. “However, financial market conditions remain fragile as company and household cash flows continue to deteriorate,” it said. “Our near-term outlook remains cautious, and UBS will continue its program to strengthen its financial position through reductions in risk positions, risk weighted assets, total assets and operating costs. This will allow us to focus management and other resources on securing and building the firm’s core client businesses.”

IE