BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
INTERNATIONAL -- SPECIAL REPORT

The Swiss Will Bank on Him (int'l edition)


Luqman Arnold may be a British banker, but he has never yet worked for a British bank. Since graduating from the University of London with an economics degree in 1972, the 50-year-old has worked for a succession of U.S. and European institutions, including France's Paribas, where he was the first foreigner on the executive committee, and Switzerland's Credit Suisse First Boston. He will become president of UBS, the largest Swiss bank, at next year's annual shareholders' meeting. That makes him the first foreigner ever to hold such a high-ranking position in a Swiss financial institution.

Large European banks have long been highly international. But the highest-level jobs have nearly always been reserved for nationals. The fact that an outsider such as Arnold is being appointed to the presidency marks another major step forward in the globalization of UBS, which was formed in 1998 by the merger of Union Bank of Switzerland and Swiss Bank Corp.

International banks such as UBS need cultures that are open to change and diversity. That's one area where Arnold thinks his background will be a benefit. ''Living and working abroad makes you more open and less dogmatic,'' he says. Arnold has lived in London, Paris, Singapore, Tokyo, London again, and now Zurich during the past eight years. The fact that his father is English and his mother is an Indian from Bengal who was educated in Ireland, also heightens his cultural sensitivities.

Yet UBS remains rooted in Switzerland, however international its reach. Arnold recognizes he is ''on trial'' there. ''I have to demonstrate a sufficient understanding of Swiss sensibilities,'' he says. ''The fact that he's not Swiss is probably a big benefit given the fact that more than half the staff aren't either,'' says one large shareholder. His main challenge is to ensure the smooth integration of PaineWebber Inc., which UBS bought in July. He also needs to revitalize the $1.2 trillion asset management operation.

Arnold will spend four days a week in Zurich but go to London--where his wife is co-owner of a chain of Thai restaurants--for the weekends. ''That's for the sake of my 6-year-old son,'' he says. ''We wanted stability for him.'' Although his appointment breaks new ground, Arnold stresses that it is only ''10% an interesting innovation.'' He was already chief financial officer, and his executive board partners all remain in place. ''So it should be viewed as 90% continuity,'' he says. That's the kind of continuity that's needed.

By David Fairlamb in Frankfurt

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