ZURICH - UBS AG said Tuesday that it will drop the PaineWebber and Warburg names from its brokerage and investment banking businesses in next year's second half.
Switzerland's biggest banking company said it will use only its brand.
UBS, formed from the merger of Swiss Bank Corp. and Union Bank of Switzerland in 1998, bought PaineWebber Group Inc. for $11.5 billion in 2000 as part of a push into the United States. Swiss Bank had bought the London-based merchant bank S.G. Warburg in 1995.
In the past decade banks have rushed to combine with brokers and securities firms to expand beyond lending into underwriting and merger advisory. That has led to the demise of some of Wall Street's oldest monikers. Morgan Stanley dropped the Dean Witter name this year (they merged in 1997), and Citigroup Inc. said it intends to abandon the Salomon label, a Wall Street fixture for nine decades.
UBS said it would focus on one brand to alleviate confusion. "Particularly in the U.S., it was becoming increasingly challenging to differentiate among the different brand names," president Peter Wuffli said on a conference call Tuesday.
Separately, the company posted its first quarterly profit increase since late 2000, having cut its payroll and avoided the bad loans that dragged down rivals.
Third-quarter net income rose to $651 million, but Mr. Wuffli told reporters that fourth-quarter profit would be dampened by about $690 million in costs for the brand changes. The PaineWebber brand was among the $3.25 billion of intangible assets UBS acquired when it purchased the No. 4 U.S. broker, a spokeswoman said.
UBS has shed about 700 jobs over the past 12 months and has reduced pay for top managers to trim expenses as pretax profits in investment banking and asset management declined. Dow Jones reported Tuesday, however, that UBS plans to hire 500 brokers.
"We are in the midst of assessing the right levels for bonus payments," Mr. Wuffli said. "There are a lot of judgments going into these decisions, having to do with assessments of performance as well as competitive practices and market levels."
