Hug a banker

12 December 2012 By Dominic Elliott

The wealth manager thrilled investors with plans to de-risk investment banking. Fixed income will give way to equities and advisory, leaving a mega-boutique resembling a jumbo Evercore Partners. The snag? The rump business needs some love to be a destination employer again.

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Axel Weber, UBS’s chairman, said in an interview with German magazine Der Spiegel on Dec. 3 that his experience as a regulator had helped him to construct a plan for the Swiss group’s investment bank that was announced six weeks ago. Weber said under the plan UBS would fulfil its capital requirements earlier than rival banks, whose finances would be like those of the “northern German lowlands relative to the Swiss Alps”.
UBS announced on Oct. 30 a plan to split its investment bank into a core unit and non-core unit, which it plans to wind down over several years. UBS is exiting some fixed income businesses to concentrate on advisory, research, equities, foreign exchange and precious metals. The businesses that the Swiss bank has left or is leaving include structured credit and rates, sovereign, supranational and agency debt underwriting, correlation trading, and most long-dated or complex derivatives.

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