Andrea Orcel, chief executive officer of UBS AG (UBSN)’s investment bank, is creating two client groups in an overhaul of the operation to revive profit.
Corporate client solutions will include merger advisory, capital markets and financing solutions for corporate, financial institutions and private-equity firms, Orcel said in a memorandum to employees today obtained by Bloomberg. Investor client services will encompass equities, foreign exchange, precious metals, rates and credit, he said.
UBS, Switzerland’s biggest bank based in Zurich, said last week it will exit most of its fixed-income businesses to boost profitability of the investment bank, hurt by stricter capital requirements and Europe’s sovereign debt crisis. Orcel was named the sole head of the shrunken unit, with Carsten Kengeter moving to wind down debt businesses. UBS plans to boost the pretax return on equity of the investment bank to more than 15 percent from next year compared with 12 percent to 17 percent targeted previously.
“The many moving parts of the restructuring plan serve to enhance UBS as a very well-capitalized bank with excellent capital return prospects,” Espirito Santo Investment Bank analysts, led by Andrew Lim, said in an e-mailed note today. “The plan de-emphasises the investment bank, where previously the market was attributing a near-zero and indeed sometimes even negative valuation.”
The corporate client solutions units, which will contribute about a third of total revenue for the investment bank, will be organized regionally with David Soanes heading Europe, the Middle East and Africa, Steve Cummings in the Americas and Matthew Grounds in the Asia-Pacific region, Orcel said. Rajeev Misra, who co-headed fixed income, currencies and commodities with Roberto Hoornweg, will become global head of financial solutions, he said. Hoornweg is leaving the bank, Orcel said in a separate memo.
Soanes has been leading global capital markets for UBS since 2011, Cummings was the chairman of investment-banking division in the Americas, while Grounds co-headed investment banking with Simon Warshaw. Warshaw will advise clients and report to Orcel, according to the memo.
Investor client services, contributing two thirds of investment-bank revenue, will be led by Mike Stewart as global head of equities, Chris Vogelgesang and George Athanasopoulos as global co-heads of foreign exchange and precious metals and Chris Murphy as global head of rates and credit, Orcel said. Stewart, Vogelgesang and Athanasopoulos are staying in their previous roles, while Murphy has been heading the global rates business.
All eight men will report to Orcel. Richard Morton, a spokesman for UBS, confirmed the contents of the memorandum.
“We will collaborate across the entire franchise and ensure the investment bank is more complementary to wealth management, global asset management and our Swiss universal bank,” Orcel said.
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