(Photo: Reuters)
(Photo: Reuters)

UBS shares rose to a seven-month high in the first trading session since multiple media reports reported the bank will slash 10,000 jobs and wind-down most of its fixed income operations.

Although the Swiss investment bank declined to comment on the reports, its stock rallied by over 5 percent to CHF12.860 as of 1010 GMT - more than half of its one-year gain - as investors reacted positively to UBS' retreat from capital intensive trading businesses to focus on providing more returns to shareholders.

According to a number of media reports, as part of UBS' CEO Sergio Ermotti's plan to overhaul the Zurich-based bank, multiple media reports have said that UBS intends to separate and wind-down its fixed-income operations and further reduce its risk-weighted-assets by an additional CHF100bn.

If the cuts do go ahead, UBS could meet its capital requirement goals under Basel III much quicker than expected and therefore pay "material dividends" to shareholders more quickly too.

In June this year, both UBS and rival Credit Suisse, were given a stern warning by the Swiss National Bank (SNB) for falling behind in capital requirements under international Basel III rules, which are coming into force in 2019.

The SNB added that while it is aware that both UBS and Credit Suisse both hold more capital than its European counterparts, they would both need to shore up more capital soon.

Meanwhile, rival Credit Suisse has had to also take a similar number of steps in buoying up its balance sheet, by shedding assets and reducing staff.

Only last week, the group revealed it would be adding another CHF1bn worth of cost cuts over the next three years.

Credit Suisse has already announced cost cuts worth CHF3bn, making sweeping redundancies and selling off riskier assets, in a bid to meet the legal capital requirements imposed by Basel III.

Last year the Swiss investment bank announced 3,500 job cuts, as part of a global efficiency programme seeking to cull 7 percent of staff.