UBShas launched a shake-up of its investment banking division to reduce proprietary risk-taking after suffering heavy losses in the US subprime mortgage meltdown.

In an internal memo to staff, Marcel Rohner, UBS's chief executive, said the bank would halve the number of employees in its real estate and securitisation businesses and move its troubled mortgage investments into a -separate restructuring unit. The bank also plans to pull out of fixed-income proprietary trading in the US and combine its equity and debt underwriting operations.