Santander's plan to poach veteran investment banker Andrea Orcel from UBS imploded over pay. Now, the Spanish lender is effectively giving notice to the Swiss bank over business ties the two share.
Madrid-based Santander bumbled the hire of UBS investment banker Andrea Orcel as its next CEO when pay discussions over bonuses he had stowed at the Swiss bank foundered. There are no winners: UBS is lost a figurehead for its investment bank, Botin and Santander are humiliated for their poor handling of the matter, and Orcel is out of a job and reportedly weighing legal recourse.
On Wednesday, another setback for UBS emerged: it will almost definitely lose the Spanish bank as an investment banking client following the row, Santander Chair Ana Botin signaled.
«We have a great relationship with UBS, we're going to continue working with whomever gives us the best advice, and we respect their decision,» Botin told «Bloomberg» when asked about UBS in a televised interview following fourth-quarter results, without elaborating.
Swung to Loss
Santander had long been a key client of Orcel, a 55-year-old veteran European rainmaker. The bank reportedly swept as much as $50 million in dealmaking fees into UBS' coffers. While Santander's encouragement of others to compete for the mandate is hardly surprising, it is a setback for Piero Novelli and Robert Karofsky, who took over when Orcel left in September.
Last week, the unit swung to a fourth-quarter loss, with every business except for foreign exchange trading clocking lower revenue on the year. UBS' traditionally strong advisory services – Orcel's forte – and its equities franchise were especially hard-hit.
