UBS, the European bank with the biggest losses from the credit crisis, is set to announce plans to eliminate about 1900 jobs in its investment banking, equities, and fixed income divisions, about 10 per cent of the total investment banking staff. .

The plan, which may be announced at today's shareholder meeting, would also eliminate jobs of support staff. .

The job cuts would be on top of 7000 already announced by UBS, which has taken write-downs and credit losses of $US44.2 billion ($55 billion) since the credit crisis began last year.

Staff numbers at the investment bank division had already been cut 12 per cent since the middle of last year.

"It is unquestionably the worst hiring climate I've seen in 30 years in the City for the European markets," said Shaun Springer, chief executive of Napier Scott Executive Search in London.

Lehman Brothers, the securities firm that filed for bankruptcy two weeks ago, eliminated 750 jobs in its European fixed income and personal investment management units yesterday after talks to find a buyer failed.

The Lehman and UBS cuts would bring to more than 131,700 the number of jobs eliminated at banks worldwide since July last year.

The job cuts come amid a widening crisis in the British and European finance sector.

European governments have come to the rescue of five banks this week as the worst financial crisis since the Great Depression spreads beyond the US. Belgium, the Netherlands and Luxembourg agreed to inject €11.2 billion ($19.8 billion) into Belgian financial services giant Fortis for minority stakes, while Belgium and France led a €6.4 billion bail-out of Dexia.

Bradford & Bingley was seized by the British Government, Iceland's Glitnir Bank was bailed out by the country's Financial Supervisory Authority and Germany's Hypo Real Estate Holding AG received a government loan guarantee.

The British Prime Minister, Gordon Brown, voiced confidence yesterday that a bank merger announced two weeks ago between HBOS and Lloyds TSB would proceed. He was speaking after HBOS shares had plunged nearly 14 per cent because of reports that the merger had struck a snag.

Mr Brown said he had had indications from those involved that they could overcome any obstacles.

Earlier, an HBOS spokesman denounced the market talk as speculation.

Lloyds TSB said it was proceeding with the terms of a deal that was agreed between the pair last month.

Bloomberg