UBS Installs a New, Lean Investment Banking Team
Now that UBS AG (NYSE:UBS) has announced it will lay off 10,000 employees and scale back its fixed-income trading business, the bank is repopulating its overhauled investment banking division. The new investment bank will be split into two parts: Investor Client Services, and Corporate Client Solutions.
Investor Client Services will manage what trading business the bank is keeping, such as equities and foreign exchange. The team will be led by: Mike Stewart, Global Head of Equities; Chris Vogelgesang and George Athanasopoulos, co-heads of Foreign Exchange and Precious Metals; and Chris Murphy, head of Global Rates and Credit.
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Corporate Client Solutions will act as a more traditional investment bank, and provide equity underwriting and merger advise for companies and private-equity firms. The group will be led by Steve Cummings, David Soanes, and Matthew Grounds.
Andrea Orcel, who heads the investment bank, told Bloomberg that the new, leaner bank will work to “ensure the investment bank is more complementary to wealth management, global asset management and our Swiss universal bank.” Orcel will try breath life and security into a bank that lost billions in the financial crisis. He replaced Carsten Kengeter who was in charge of the bank during a $2.3 billion rogue trading scandal in 2011.
Massive layoffs and executive shuffling at UBS follows similar moves by other leading banks. Rival Credit Suisse Group (NYSE:CS) cut 7 percent of its workforce in 2011, and promised more cuts will come as regulation mounts, the global economy remains weak, and reduced trading volume necessitates fewer employees.
JPMorgan Chase (NYSE:JPM) overhauled its investment and corporate banking division in September, and has seen a number of executives shift in and out following its own crisis-time losses and some bad press after the so-called “London Whale Trade.”
The global financial industry has been evolving since the 2008 crisis. A crackdown on high-risk trading activities has caused a number of banks to retrench themselves in wealth and asset management, and private banking.