UBS' profits are under pressure, and the Swiss bank is wary of deeper spending cuts. The end of the road for CEO Sergio Ermotti?

The Swiss wealth giant's third-quarter results have something for everyone: managed assets of $2.5 trillion hit a record, and the bank managed to reverse second-quarter withdrawals with new money this quarter. On the other hand, three of four divisions booked lower profits, while shareholder's net profit dropped 16 percent.

Investors seemed initially pleased with the result, sending UBS' shares higher right after the result. Behind the knee-jerk response to the quarter, UBS is stagnating: the private bank needs a jumpstart and the investment bank has been slow to make more of its unfettered access to the world's wealthy. 

Not Flattering

The picture isn't a flattering one for UBS' executive board, despite a replenishment last month. The bank has been able to count on investor patience until now, but signs are mounting that that is changing: several CEOs at direct rivals to UBS have come under intense pressure. Will long-standing UBS boss Sergio Ermotti face a similar fate?

The strongest deterrent is John Flint (pictured below), whom HSBC disposed of as CEO just 18 months into his tenure. «The board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us,» Chairman Mark Tucker commented on the day of Flint's sudden departure after almost 30 years.

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Mike Corbat: Radical Cuts as a Remedy

Flint had faced criticism that he wasn't decisive enough with spending cuts. His stand-in, Noel Quinn, was less squeamish, revealing a plan to ax 10,000 more jobs at the British-Asian lender.

Long-standing Citigroup boss Mike Corbat (pictured below) also came under pressure – the first time last year from an activist investor. Corbat managed an unlikely escape thanks to the implementation of resolute cost cuts. He restructured the retail bank, merged investment banking units, reshuffled the executive and shed hundreds of jobs in trading.

The stock exchange exulted: shares of the U.S. bank has fared better than those of most rivals in 2019.

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