UBS sells Brazilian arm for $2.5 bn

ZURICH: Troubled banking giant UBS AG sold its Brazilian business on Monday for about $2.5 billion to BTG Investments in an effort to reduce risk and streamline its operations.

Switzerland's largest bank, which is cutting thousands of jobs as a result of billions in losses over the past two years through bad investments, said the transaction would result in a ``small loss'' when quarterly results are published in May.

The sale of UBS Pactual is still subject to regulatory approval and will combine cash and the assumption of debt, the bank said. It is expected to be completed in the middle of the year.

``The sale of the Brazilian business is consistent with UBS's policy to continue to reduce its risk profile, strengthen its balance sheet and sharpen its business focus,'' UBS said. ``UBS expects no disruption to its other businesses as a result of the transaction.''

UBS said last week it would slash 8,700 jobs - more than 10 percent of its work force - as part of across-the-board cost-cutting to return to profit after racking up billion-dollar losses for yet another quarter. The job cuts come on top of a reduction of 1,600 since the end of last year.