UBS Needs Talent – US-FOREX.US
When it came to explaining UBS’ woeful performance in the second quarter during a conference call last week, Chief Executive Oswald Gruebel was very blunt about what had gone wrong at his fixed-income division. “I would say the three issues are people, people and people,” he told the analyst who had asked him what the firm would do to “turn around” the fixed-income business. The firm, Gruebel said, didn’t have “especially strong areas in the fixed-income market,” adding that it was in the process of recruiting new management.That recruitment drive is in full swing. In an internal UBS
memo sent around on Monday-and seen by Forbes-the coheads of that FICC division announced a string of senior new hires. The new recruits include Dimitri Psyllidis, the former cohead of Merrill Lynch’s FICC division, who will be responsible for UBS’ FX and Rates trading globally, and Dan Brereton, a former UBS employee who had been snapped up by French bank BNP Paribas. Other new hires came from banks that had not tapped any government for support, including Barclays’ investment banking division, Barclays Capital , and Deutsche Bank .
The FICC division heads Carsten Kengeter and Jeffrey Mayer said the hires, “along with others that will follow” would help the company meet its aim of turning into ” a leading FICC franchise as measured by profitability, client ranking and market share.” According to analysts, there’s a logic to top bankers wanting to sign up to UBS, despite its tattered reputation, and assistance from the Swiss government, which will-in the short term at least-limit its abilities to take on much risk. “It is one of the best opportunities out there,” says Jean Sassus of Raymond James Equities. “Instead of a bank such as Merrill, where you can wonder what are the Bank of America’s actual plans for your business, at UBS you have a clear mandate and a management with a reputation for delivering. They are saying: We are going back into the street, and there is only an upside for you.”
Recruitment fever has returned to banks on both sides of the Atlantic, though particularly with those that have received state aid, it hasn’t been without controversy. Forbes recently revealed that Citigroup
, which has received 45 billion in funds from the U.S. taxpayer, paid guaranteed bonuses to a couple of bankers from Morgan Stanley. UBS, which has put 60 billion of illiquid securities in a fund managed by the Swiss National Bank, declined to comment on whether any of the recent recruitment packages had included guaranteed bonuses. Last week, UBS reported a quarterly loss of 1.4 billion Swiss francs , bucking the trend of investment banks compensating for weaknesses in other divisions. Strengthening fixed income-and equities-will be crucial for UBS if it is to alleviate concerns about its private banking division. Talks with U.S. authorities over data on 52,000 U.S. clients suspected of tax evasion are still ongoing, despite claims that they had reached agreement on the major issues. UBS’ wealth management saw an outstream of money in the second quarter, driven by concern about this dispute.