UBS, beset by heavy write-downs stemming from the financial crisis, is to reorganise its wealth management divisions as it reported a group net loss of SFr8.1 billion ($6.9 billion) in the last three months of 2008, contrasting with a profit of SFr12.97 billion for the same quarter of 2007, while its loss for the whole of last year was SFr19.7 billion.

At the firm’s flagship wealth management arm, the Zurich-listed bank said its global wealth management and business banking division made a profit of SFr1.133 billion in the fourth quarter, compared with SFr1.861 billion in the previous quarter, or a drop of 39 per cent.

UBS said it was reorganising its wealth management divisions into two elements: Wealth Management & Swiss Bank, and Wealth Management Americas. The changes are designed to refocus the bank on its core Swiss businesses and develop its international onshore operations, UBS said in a statement.

Wealth Management & Swiss Bank will be headed by Franco Morra and Juerg Zeltner, two new group executive board members, while Wealth Management Americas will be led by Marten Hoekstra.

“With our announcements we are emphasising the importance of our core business in

Switzerland, which will be much better represented in our leadership and governance going forward,” said Peter Kurer, UBS chairman.

As well as suffering from credit write-downs and client outflows, the bank has been embroiled in a large investigation by the US tax authorities over its alleged involvement in helping wealthy US citizens to avoid paying taxes. Last year UBS decided to stop providing offshore banking facilities in the

US.

Last week, analysts at Morgan Stanley – who have an “even-weight” recommendation on UBS’ stock – said the bank continues to face headwinds in its recovery strategy. They predict that clients could pull as much as SFr63 billion from its wealth management division this year.

In today’s statement, UBS renewed its commitment to operating its investment bank, which has suffered massive credit write-downs. Last year, the Swiss group moved to put its investment bank, asset management arm and wealth management division onto a more autonomous footing. Some analysts have suggested these three units should be spun off into completely separate business divisions.

UBS said that in addition to cuts already made, it will further cut headcount at the investment bank this year to 15,000 positions.

“UBS has had an encouraging start to the year and net new money was positive in January in both our wealth management and asset management businesses,” the bank said.

However, in the fourth quarter, global wealth management and business banking suffered net client outflows of SFr58.2 billion. Global asset management, meanwhile, suffered SFr27.6 billion of outflows in the last three months of the year.

At the end of last year, UBS had a Tier 1 capital ratio of 11.5 per cent, up from 9.1 per cent at the end of 2007.

Total staffing numbers fell to 77,783 at the end of December, a fall of 1,782 from 30 September 2008.