UBS has ditched plans to move parts of its U.S. investment bank to downtown New York and will review its options in the wake of deep cost cuts designed to boost its flagging bottom line.
UBS had been in "advanced" talks to move some of its Stamford, Connecticut-based U.S. investment bank to the World Trade Center site at the southern tip of Manhattan, according to two sources familiar with the negotiations. Those talks were suddenly called off on Thursday, the sources said on Friday.
"This wasn't about not being able to come to an agreement on a price," said one of the sources, who were not authorized to speak on the record. "The explanation is about earnings."
"This was due to uncertainty over (UBS's) contraction and by how much," the source added.
UBS confirmed that it was no longer in talks about the World Trade Center site.
"UBS has been conducting a review of its real estate requirements in the Tri-State area. Part of this review involved discussions with World Trade Center management in downtown Manhattan. These discussions have been productive, but we are focused on midtown alternatives at the present time," said a spokesperson for the Swiss-based bank.
A spokesman for Silverstein Properties, which develops the bulk of the World Trade Center site, declined to comment.
One of the sources said the bank had been in negotiations for up to 1 million square feet of space at the yet-to-be-built Three World Trade Center, a high-rise building on the site which was destroyed in the Sept. 11, 2001 attacks.
The new 2.8 million square-foot building, which will be 80 stories high, is expected to open in 2015.
UBS earlier this week said it will slash jobs and review the future and size of its fixed income business after the underperforming unit hurt second-quarter earnings and forced it to to push back earnings targets.
The bank plans to cut costs by up to 2 billion Swiss francs ($2.5 billion) in the next two to three years, including a yet-to-be-detailed number of job losses.
