Investment bank UBS has confirmed it will no longer run an exotic structured products business within its fixed income, currencies and commodities division (FICC).

In an internal memo sent this week to employees, Carsten Kengeter and Jeff Mayer, co-heads of FICC, stated that the bank will discontinue its exotic structured products businesses as well as halt its remaining real estate and securitisation activities.

According to the same memo, Todd Morakis, who headed commodities, Sascha Prinz and David Sacco, co-heads of global rates, as well as credit head Chris Ryan, will leave the bank.

The Swiss bank's restructuring follows Kengeter and Mayer's analysis of a business that brought to the Swiss bank $48.6bn of writedowns and losses, making it the worst hit European bank since the start of the credit crisis. The fixed-income unit will in future focus on client business, cutting risk-taking and assets.

"We have concluded that radical change is needed in order to take FICC forward and return to profitability," Kengeter and Mayer said in the memo. The debt sales and trading business had negative revenue of CHF28.4bn ($24.6bn) in the first nine months of 2008.

As reported by SRP in October, Zurich-based UBS is in the process of repositioning its investment banking units and will cut 9,000 jobs, including some 6,100 at the investment bank. The bank has already announced it will exit municipal bonds, proprietary trading and commodities businesses, excluding precious metals.

The same UBS spokesperson confirmed that the reorganised debt business will have three units: macro, which will include foreign exchange, money markets and rates, credit and the workout group. Macro will be co-headed by Reto Stadelmann, who will focus on foreign exchange, and Yvan Ducrot, who will manage rates. The credit and the workout groups will be headed by Kengeter and Mayer, respectively, on an interim basis. Emerging markets will be headed by Ritesh Dutta.

A US-based spokesperson for the wealth management unit said it is not affected by the restructuring: "We offer open architecture in structured products for wealth management clients and that is not affected by the announcement."