5. Go on a Diet
(Image: Donald Giannatti, Unsplash)
UBS is carrying a lot of extra kilos: the bank has racked up a coterie of vice-chairmen in recent years, known around Paradeplatz as «breakfast bankers» because they have a largely symbolic role. They cost money, and if Ermotti wants to get serious about cutting UBS' spending, he should think about trimming the breakfast fat (UBS refuses to say how many vice-chairmen it employs).
Thomas Gottstein over at Credit Suisse serves as the model for cutting fat: the former investment banker cut a layer of management when he began running the Swiss bank's domestic unit. Those let go were unhappy, but the move streamlined the Credit Suisse unit and simplified communication – as well as saving money.
6. Investment Bank: Size Matters
Ermotti has chopped the formerly troubled unit’s risk-weighted assets by nearly one-third to $85.9 billion in June vs seven years ago. This is commendable – but some of the changes have arguably left UBS’ securities unit too small: If it truly wants to make its investment bank work for the wealthy, UBS must bulk up where the super-rich are.
A «FIG-heavy» leadership under Piero Novelli and previously Andrea Orcel – bankers who grew up in European banking M&A – isn’t the right way to do it. Ermotti needs to think big where wealth is being created, whether that is Silicon Valley, Shenzen, or Mumbai.
7. Asset Management as Bargaining Chip
UBS has flirted with a unit sale for more than ten years: under previous head John Fraser with extreme vigor. Ermotti has a bargaining chip with the unit but has been reluctant to use it even as rivals like Societe Generale and Credit Agricole pooled their fund management arms (Amundi).
Why not throw the unit, which will miss 2020 targets, into the ring and try to snap up a chunk of wealth business in return?
8. Back-Office Push
Switzerland's banks have long flirted with a so-called superbank: a joint endeavor to pool all the recurring paperwork that it indistinguishable from bank to bank. UBS and Credit Suisse began exploring a tie-up several years ago, but the effort fizzled.
If Ermotti were to take the initiative – and clearly, one of the Swiss banking giants will have to – then UBS would be in the lead in the project, which is of eminent importance for the industry.
- << Back
- Page 3 of 3
