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Is UBS quietly cutting UK private bankers?

It’s common knowledge that UBS’ investment bank is rapidly rightsizing in the wake of $48.6bn of writedowns. However, the UBS wealth management business has done relatively well with pre-tax earnings of CHF5.1bn in the first three quarters.

Why, therefore, is the Swiss bank allegedly embarked upon what one private banking headhunter describes as ‘a dramatic cull’ of its UK private banking operations?

UBS declined to comment. But back in May it announced plans for 5,500 job cuts, of which only 2,600 were expected to come from the investment bank (it announced another 2,000 investment banking job cuts in October).

If UBS is cutting private bankers, it’s at odds with rivals such as Credit Suisse, which still appear to be in expansion mode. Brady Dougan has, for example, hired an additional 370 client advisors this year.

According to headhunters, all of whom declined to comment on the record, UBS’ UK trimming reflects an obsession with cost cutting: “They have decided that their focus for the next 12 months is more costs than revenues,” says one.

The alleged UK private banking cull is all the more surprising given that UBS lost 10% of its London private client advisors to Vestra Wealth back in May.

Comments (5)

Comments
  1. Why the surprise???? When UBS announced a few years ago that it would recruit >100 private banking advisors it was obvious that was not possible. What they recruited, in the main, were Premium Bankers with 10m-30m of AuMs. In Swiss Banking Terms a banker with less than 100m is a junior. I think that what you are seeing is the logical effect of the original recruitment programme, namely hire 5 with 20m – let them bring that in and then fire the worst four.

  2. Gary, that doesn’t mean UBS gets to keep the $20m client. If you fire the 4 guys bringing in $20m AUM, the relationship management is gone, and the client is gone too. If you think one guy can manage his own revenue generator (his own client) and other lesser clients equally effectively, then you are mistaken. 1 or 2 clients will suffer, and thus will leave, even if it is a top brand like UBS / CS.

  3. Pietro is quite right. More so, the man tasked with the downsizing is D Reid brought in from BarCap who has ruthlessly been cutting down staff even when the wealth management arm is still profitable. It’s rumored more cuts are coming in the new year, more so in the middle and back office. Stay tuned!

  4. We’ve been informed to expect further cuts in Q1. Even though at risk, it was relatively easy to see there were junior pb’s which were unnecessary. The difference between running a book of 20m and to then jump to 40m or 60m (once inherited) is marginal. At a junior level a large proportion of the clientele on junior pb’s books came in for the name (UBS) or were passed on by more senior ca’s. The relationship in many cases was not strong, consolidation of books was relatively easy to foresee. I hope they revise their decision to cut further, as it’s fair to say UBS appears lean now.

  5. Re the 100 new PB target of a few years back Id expect the 80/20 rule still applies so UBS must continue to monitor Private Banker targets and routinely bottomslice its team and keep hiring high flying PBs to keep on target. This is normal. But id suggest instead of the “silo redundancies” in IB and PB that UBS instead re-tasks some of its best IBs to a new hybrid IB/PB role and then let these staff roll with the markets moving between IB/PB business units as required, this would reduce the cost (cash & organisational) of the banking hire/fire cycle.

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