(Corrects second paragraph to show UBS is not exiting rates and
* UBS to outsource fixed-income trading platform - source
* Move is in line with strategy - analyst
* Tougher regulation pushes banks to rethink operations
ZURICH, Jan 20 Swiss bank UBS will
outsource its fixed-income trading platform to two French
software companies in an attempt to save costs and weather
tougher regulation in the industry, a source with knowledge of
the matter said.
UBS will replace its host of platforms in its rates and
credit trading business with standardised technology from Murex
and Ion Trading, the source said. This comes after the
Zurich-based bank unveiled a three-year plan to withdraw from
parts of fixed-income trading late in 2012.
Global investment banks are rethinking their operations and,
in most cases, shrinking their businesses due to a regulatory
drive to make markets less risky and a reduction in banks
trading for their own account.
Fixed income units, which encompass foreign exchange and
commodities as well as debt and bond trading activities, are
particularly vulnerable to the sweep of regulatory change aimed
at preventing another financial crisis.
A spokeswoman for UBS declined to comment on Monday. Murex
and Ion Trading were not immediately available for comment.
"The move to outsource is in line with UBS's strategy for
their fixed-income arm and with the streamlining of fixed income
as whole," said Rainer Skierka, an analyst at J. Safra Sarasin,
who has a buy rating on UBS stock.
Societe Generale, France's No. 2 listed bank by
value, has also outsourced back-office operations to Accenture
as part of a drive to save costs.
An unexpected fourth-quarter loss at Deutsche Bank
underscored the challenges facing banks with large
(Reporting by Alice Baghdjian and Oliver Hirt in Zurich, Lionel
Laurent in Paris and Aashika Jain in Bangalore; Editing by
Louise Heavens and Erica Billingham)