UBS to cut costs and rethink fixed income unit. Markets, Capital Requirements Crimp UBS Profit. Oswald Gruebel, chief executive officer of UBS AG (UBSN), is facing a credibility gap: analysts and investors don’t take his profit target seriously. The 67-year-old CEO may have to reduce his goal for pretax profit of 15 billion Swiss francs ($18.3 billion) in 2014 by as much as 20 percent, or scrap it, as tougher capital standards and sluggish markets weigh on results, according to analysts’ estimates. The Zurich-based bank may report a 36 percent drop in second-quarter net income tomorrow, analysts estimate.
UBS is in an “intensive process” of assessing the impact of regulatory changes and markets on profits and will probably present the results of the review in November, Chairman Kaspar Villiger said this month. For Gruebel, backing off the forecasts he made in 2009 would suggest he misjudged UBS’s ability to rebound from the biggest loss in Swiss corporate history. UBS AG chief executive officer Oswald Gruebel. Close UBS AG chief executive officer Oswald Gruebel. Close Open ‘Huge Step’ UBS: Basel Rules Leave Banks Overcapitalized. UBS Aims for Top-5 Ranking on U.S. Deals After Bankers Defect. UBS AG (UBSN), which has lost at least 50 dealmakers from its U.S. investment bank since 2009, remains committed to the unit and aims to reach a top-five rank, said Matthew Grounds, global co-head of investment banking.
“I’m only interested in getting our market position in the Americas to where it needs to be,” Grounds, 41, said in an interview yesterday at the firm’s New York office. The bank has dedicated capital for hiring, he said, declining to elaborate. Given the company’s global size, “I want to be top five.” UBS, Switzerland’s largest lender, has struggled with defections since cutting its bonus pool about 80 percent during the 2008 credit crisis. They included Richard Leaman, 48, the investment banking chairman, and leaders of teams for health care, energy, and telecommunications, media and technology. “The question is whether the ship is sinking, so those bankers who can find another job are leaving,” said Roy Smith, a finance professor at New York University. Moelis, Jefferies. Financials - UBS fears missing ambitious targets. Companies / Banks - New-look UBS anxious to exploit recovery.
UBS Case Marks Widening Gyre of Criminal Probe Into Muni Bonds. A UBS AG (UBSN) banker wanted to win an investment deal with a Rhode Island municipality that was to be awarded to the highest bidder. Instead of offering the best price, he secretly split half of UBS’s $1.4 million profit with another bank to get the rival to back off. The 2002 transaction with the unidentified municipality, described in documents tied to UBS’s $160 million settlement with the U.S. Justice Department and the Securities and Exchange Commission this week, shows the expanding arc of a criminal investigation that has taken more than four years. “My guess is they’re going to be looking at the other big banks next,” said Mark Rosman, a partner at the law firm Wilson Sonsini Goodrich & Rosati in Washington and a former assistant chief of the national criminal enforcement section of the Justice Department’s antitrust division.
UBS followed Bank of America in settling a probe prosecutors say spanned more than a dozen Wall Street banks, insurers and advisers. ‘Active and Ongoing’ Companies / Banks - UBS pays $160m to settle US bid-rigging charges. UBS Net Profit Slips As Revenue Falls. UBS Dominance in Australia M&A to Weather Failed ASX Deal. UBS AG (UBSN)’s lead among merger advisers in Australia is big enough to withstand the collapse of Singapore Exchange Ltd.
(SGX)’s $8 billion bid for ASX Ltd. (ASX), the bank’s second-biggest pending deal in the country. UBS, advising Australian bourse ASX on the planned sale to its regional rival, still retains a lead ahead of Deutsche Bank AG with $56 billion of deals involving local companies in the past 12 months, according to data compiled by Bloomberg. Treasurer Wayne Swan blocked the bid today after the Foreign Investment Review Board said it wasn’t in the national interest. Zurich-based UBS built a lead over Wall Street and European rivals by advising on the three largest takeovers involving Australian companies in the past year, including the ASX deal. The bank may get picked to advise ASX again if the bourse is targeted by another bidder, said Peter Swan, finance professor at the Australian School of Business at the University of New South Wales in Sydney.
Hanging On. Citigroup Hires UBS European Mergers Chief Pat Guerin for Asset Sales Team. Citigroup Inc. (C), the third-largest U.S. bank by assets, hired former UBS AG (UBSN) European mergers co- head Pat Guerin to advise clients on asset sales. He will be based in London and report to European M&A chief Wilhelm Schulz, New York-based Citigroup said in an internal memorandum to employees. A spokeswoman in London confirmed the contents of the document today. Citigroup said in February that it planned to hire as many as 20 senior corporate and investment bankers in Europe in the first half of 2011 as it rebuilds a team weakened by departures.
UBS, Switzerland’s largest bank, yesterday named Liam Beere and Cary Kochman joint global heads of mergers and acquisitions, and appointed Alison Harding-Jones and Jonathan Rowley co-heads for European mergers. Separately, Citigroup also hired Stuart Popham, a former senior partner at law firm Clifford Chance, as a vice chairman of Europe, Middle East and Africa banking. Companies / Banks - UBS risks running out of steam in Asia. Capital Markets - UBS subpoenaed over alleged Libor rigging. UBS Top Investment Banker's Pay Falls 29% UBS Names Joint Global Heads for Investment Banking Division. UBS AG (UBSN), Switzerland’s biggest bank, named Matthew Grounds and Simon Warshaw joint global heads of its investment banking division after John Wall retired. The two will work alongside Jimmy Neissa, who was co-head of the unit with Wall, with immediate effect, the Zurich-based bank told employees in an e-mail. Grounds will remain head of UBS’s Australian unit. Warshaw, head of investment banking in Europe, is advising British Sky Broadcasting Group Plc’s independent directors on the pay television’s 7.8 billion-pound ($16.7 billion) takeover by Rupert Murdoch’s News Corp.
UBS’s revenue from managing stock and bond sales and advising clients on mergers and acquisitions fell 16 percent in 2010 from a year earlier to 2.84 billion Swiss francs ($3.1 billion). That was lower than UBS’s eight biggest competitors, according to data compiled by Bloomberg. Sole Responsibility Wall, born in 1961, returned to UBS in 2009 after taking a short break from the industry. Companies / Banks - UBS chief attacks UK for neglect of banks. Credit Suisse Banker Bagios Accused of Helping Clients Cheat IRS at UBS. (Corrects 18th paragraph to say Goldstein has not pleaded guilty.) Credit Suisse Group AG (CSGN) banker Christos Bagios helped 150 American clients hide as much as $500 million in assets from U.S. tax authorities when he worked at UBS AG (UBSN), according to a criminal charge made public yesterday. Bagios, who was arrested and jailed Jan. 26 in a crackdown on offshore tax evasion, appeared yesterday in federal court in Fort Lauderdale, Florida.
U.S. Magistrate Judge Robin Rosenbaum denied his request for his immediate release after his lawyers argued he failed to get a prompt hearing on the evidence against him. The judge made public the charge against Bagios, 45, who is accused of conspiring to defraud the U.S. by impeding the Internal Revenue Service. Bagios, a Swiss resident and Greek citizen, joined Credit Suisse Private Advisors in 2009 after spending more than 15 years at UBS. ‘Part of a Team’ January Appearance U.S. Transfer Delayed The case is U.S. v. Companies / Banks - UBS in combined securities division reshuffle. US / Politics & Foreign policy - US arrests Swiss banker in tax probe. Companies / Banks - UBS recovery slows in fourth quarter. Gruebel's Rebuilt UBS Trails Credit Suisse in Money From Rich. UBS AG, rebuilding after a government bailout and a U.S. tax investigation that forced it to hand over names of rich clients, probably attracted fresh funds to its private bank for a second straight quarter.
The reversal, after 27 months of outflows, is a sign that Chief Executive Officer Oswald Gruebel has patched up Switzerland’s largest bank following its near collapse in 2008 and the U.S. probe. The Zurich-based company may report 2010 earnings of 7.2 billion francs ($7.5 billion) tomorrow, its first annual profit since 2006, according to 21 analysts surveyed by Bloomberg News. The challenge now: Generate fatter profits from the $1.7 trillion UBS oversees for wealthy clients while elbowing aside Credit Suisse Group AG, which raked in more assets than any Swiss bank since the financial crisis began. The UBS AG company logo sits outside the bank's headquarters in Zurich. Close The UBS AG company logo sits outside the bank's headquarters in Zurich. Close Open Slower Pace 15 Percent ROE. UBS Warns of Costs of Battle for Talent in Asia.