UBS to Cut 10,000 Employees by 2015
Swiss banking giant UBS will be cutting its work force by 10,000 over the next two years as it moves away from its less lucrative fixed income business, and attempts to transform itself into “the UBS of the future,” officials say.
“By concentrating on its traditional strengths in advisory, research, equities, FX and precious metals and by exiting business lines, predominantly those in fixed income that have been rendered uneconomical by changes in regulation and market developments, UBS will reduce costs significantly while driving further efficiencies across the group more rapidly,” according to an official statement.
UBS will be applying “lean front-to-back processes across the bank” to simplify product portfolio and production processes, officials say. “As a consequence, in 2015, UBS expects its headcount to be around 54,000 compared with approximately 64,000 today.”
The leaner operational structure of UBS will consist of the Corporate Center and five business divisions: wealth management; wealth management Americas; the investment bank; global asset management; and retail & corporate businesses.
During the first quarter of 2013, the bank will move “exited businesses and positions” to the Corporate Center unit, which will be overseen by Carsten Kengeter, who has stepped down from the UBS Group Executive Board (GEB), officials say. Kengeter will report to Sergio P. Ermotti Group CEO for UBS.
Kengeter will manage the exited businesses and positions to “optimize risk and returns over time,” officials say. “This team will manage the sale or exit of these positions within the robust oversight structure that has successfully supported our risk-weighted asset reduction in the Legacy Portfolio.”
As part of the overhaul, Andrea Orcel will become CEO of the UBS Investment Bank as of Nov. 1, officials say. Orcel was appointed co-CEO of UBS Investment Bank and a member of the GEB in July 2012 after joining from Bank of America, where he had been executive chairman of Bank of America Merrill Lynch since 2009.
The bank will also have two core client segments:
- Corporate Client Solutions for UBS’s advisory and solutions businesses and execution for corporate, financial institutions and sponsor clients. UBS expects this segment to generate around one-third of the investment bank’s revenues and utilize “around 15% of its Basel III RWAs;”
- And Investor Client Services for execution, distribution and trading of equities, FX and precious metals for institutional investors; and support for the wealth management businesses. This unit will maintain risk facilitation capabilities for debt capital market and wealth management franchises.
These actions will lead to UBS being “less capital and balance-sheet intensive, highly cash flow generative, more focused on serving its clients and capable of maximizing value for its employees and shareholders,” officials say.
In addition, savings will also be achieved by “the complete exit of business lines” in the investment banking unit, which will cut “associated front-to-back costs.”
The streamlined investment bank unit will cut “excess management layers” and will bolster controls, officials say. “A reduced real estate footprint and more focused technology requirements will also lower costs.” There will also be “an independent buying entity which will gain further efficiencies.”
Citi Transaction Services Names Global Head of Clearing
Citi Transaction Services, a division of Citi’s Institutional Clients Group, has appointed Samuel Itzcovitz as global head of clearing and financial institutions payments, officials say.
Itzcovitz will be responsible for the growth, development and transformation of the global clearing and financial payments business for financial institutions. He will report to Ebru Pakcan, Citi’s global head of payments.
Itzcovitz has been with Citi Transaction Services in Australia for eight years and has led several divisions across product management, client sales management, public sector and the bank services group, officials say. He most recently led the treasury and trade solutions business for Australia and New Zealand, overseeing cash management, trade services and trade finance offerings. He also headed the bank services group from its inception in Australia and New Zealand in 2008. He began his career at Westpac Banking Corporation in 1993.
SEC Appoints Andrew Calamari as Director of NY Regional Office
The SEC recently named Andrew M. Calamari to be the director of the agency’s New York Regional Office, officials say. Calamari, who joined the SEC in 2000, has been serving as acting director of the New York office since the promotion of George Canellos to deputy director of the Division of Enforcement earlier this year. Calamari will oversee a staff of 400 that encompasses enforcement attorneys, accountants, investigators, and compliance examiners.
The New York office has jurisdiction over more than 4,000 investment banks, investment advisers, broker-dealers, mutual funds, and hedge funds. Calamari has previously served as the senior associate director and co-head of enforcement for the New York Regional Office since 2004.
Innovest Systems Picks a CFO
Trust accounting and wealth management solutions vendor Innovest Systems has tapped a 20-year industry veteran Todd Graber to be its chief financial officer (CFO), officials say. Graber will be responsible for Innovest’s accounting and financial operations while implementing overall strategic plans intended to bolster Innovest’s growth. Prior to Innovest, Graber had executive-level finance posts with OTC Markets Group, Inc.; Quadriserv; LaBranche and Co.; Lehman Brothers and Arthur Andersen.
SIFMA’s Board Elects Officers
The board of directors of SIFMA has elected a new slate of principal officers for 2013 that includes: Chet Helck from Raymond James Financial as chair; Jim Rosenthal from Morgan Stanley as chair elect; Bill Johnstone from Davidson Companies as vice chair; and Bernard Beal from M.R. Beal & Company as treasurer.
“Chet’s valuable insight on issues affecting consumers and investors will be a tremendous benefit to SIFMA and our industry as we continue to restore trust and confidence in our markets,” said T. Timothy Ryan, Jr., president and CEO of SIFMA in a prepared statement.
A full list of the executives elected as directors of the board with terms concluding in 2016 is available via SIFMA’s website.
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