The Swiss bank’s widely-expected rejuvenation under new CEO Ralph Hamers fell short of expectations. Instead of a radical strategy plan, he is taking UBS on a journey – which includes restructuring.

Six months into running UBS, CEO Ralph Hamers fleshed out the details of his plans to rejuvenate the $4.31 trillion wealth manager. The result is enshrined in a purpose statement: «Reimagining the power of investing. Connecting people for a better world.»

UBS will continue to «evolve» our strategic and financial plans, and unveil targets next January. This represents a thin body of work compared to high expectations from Hamers, a 54-year-old banker and digitization expert who was hired to kickstart growth at the hidebound Swiss wealth manager.

Tried-And-Tested Method

The only specific aim UBS disclosed was to cut $1 billion off its spending by 2023 – a method tried-and-tested by previous management. «These outline the actions we are taking to unlock the power of UBS and evolve into a more client-focused, more agile, more digital firm,» it said.

UBS plans to plow the money it saves back into its two primary growth markets, the U.S. and Asia, where it is keen to grow in mainland China. For UBS, which stomached a $774 million loss on Archegos in the first quarter, the vague reference of connecting people sounds like a conflict of interest waiting to happen.

Where's The Beef?

On one hand, the world's largest wealth manager with a strong focus on sustainability and making a difference in the world, on the other a considerable capital markets player which isn't immune from the occasional accident.

The former ING boss doesn't want to change that: the loss from Archegos alters neither its investment banking focus nor that of its prime brokerage, Hamers told «Bloomberg» on Tuesday. The big change was the advancement of technology boss Mike Dargan into top management, with a wider digitization job.

Restructuring Pain

The bank plans to put a personalized, relevant, on-time, and seamless client experience as well as sustainability at the center of everything it does, Hamers said. Investors sent the shares more than three percent lower, due in part to the hit from Archegos as well as the vagueness of its strategy.

However, Hamers signaled the journey may be rocky: he wants to cut UBS' spending by $1 billion by 2023, and keep costs at a lower level. Finance chief Kirt Gardner told analysts the Swiss bank is preparing restructuring measures, which will cost $300 million next quarter.

Hinting At Job Cuts

Neither Hamers nor Gardner presented details, beyond saying structure and governance will be simplified in order to spend more time with clients. A sign of job cuts to come? Six months is enough time for Hamers to have recognized that UBS' hierarchy is clunky and its process-driven approach makes the bank lumbering.

Doing away with the operating chief job, the spending target, and the planned restructuring are indications that Hamers will be more forceful in coming quarters. For now, he is communicating more like an executive just back from a stint in Silicon Valley than a cost-focused corporate reformer.


Peter Hody contributed reporting