Loading...
According to reports, problems amongst the top managers of UBS are hampering the efforts of Chief Executive Sergio Ermotti to issue cutbacks and put in place other ideas at the company. Ermotti has not been seen much outside of the bank but sources say he has been working towards restructuring the company. Ermotti took over for Oswald Gruebel, who quit, just one year ago.
“Ermotti hasn’t consolidated his hold on power and is by nature more collaborative than Gruebel was, which has inadvertently fostered infighting,” a top UBS banker told Reuters.
According to the reports, one of the top critics of Ermotti is that of private banking head Juerg Zeltner, who was trying to acquire the head job last year. The other top critic is that of Switzerland Chief Executive Lukas Gaehwiler.
“It is true that Sergio has ruffled some feathers, especially with people who fear their fiefdoms might be curtailed,” a UBS banker said.
Analysts believe that UBS will announce more restructuring ideas when they release their third-quarter earnings on October 30.
Get JD Journal in Your Mail
Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!
“I believe UBS has been very busy trying to pull costs out of the business, especially investment banking, and wouldn’t be surprised if we get a mini-strategy update around third-quarter results which gives more flesh to how much further they can go in cost-reduction”, Nomura analyst Jon Peace said.
It seems as though Ermotti warned employees and investment bankers for UBS of future cuts when he issued comments to the newspaper of Swiss Finanz und Wirtschaft.
“I don’t want to lull anybody into thinking better times are coming. Instead, I want to adjust our business model to the new reality. We want to earn a return on equity of 12 to 17 percent for our shareholders and be our clients’ first choice. We will do everything necessary to reach that goal.”
Recently, Handelszeitung, a Swiss weekly, described Ermotti as a ‘part-time Chief Executive.’ In a statement released by UBS, the company denied those claims, saying, “After becoming CEO of UBS Group, Sergio Ermotti abandoned all privately held mandates, as he has confirmed publicly on several occasions. His financial participations do not take up any of his time.”
“I think Ermotti’s managed to bring some calm back to UBS after it was hit by the trading turmoil, but the fact is the cost issue remains,” an external UBS consultant said about Ermotti. The consultant had to speak anonymously because he is not permitted to speak to the media.
