Orcel's revolution only just starting at UBS

Fri Sep 21, 2012 2:03am EDT
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By Sophie Sassard and Sarah White

LONDON (Reuters) - A cultural revolution is under way at UBS UBSN.VX under new investment bank boss Andrea Orcel, who has lifted morale by bringing in clients but raised fears among old hands at the Swiss bank that they will bear the brunt of expected lay-offs.

The man behind some of the biggest banking deals of the last decade, including the ultimately ill-fated acquisition of ABN Amro by Royal Bank of Scotland in 2007, was brought in to help UBS rebound from a rogue trading scandal last year which cost it $2 billion and had a damaging effect on morale.

A prominent merger and acquisitions specialist poached from Bank of America Merrill Lynch (BAC.N: Quote), Orcel has made his mark since he was hired in July by UBS Chief Executive Sergio Ermotti to work alongside former bond trader Carsten Kengeter.

Orcel has already created a circle of former colleagues who have followed him to UBS. This could yet expand, insiders at the Swiss bank believe, with further staff reshuffles likely.

Like other investment banks, UBS is not in a position to hire more staff as fee income is under pressure from a drop-off in advisory work and trading volumes, though looming job cuts could make room for new blood.

Ermotti, also new to his role, has decided not to shut the Swiss bank's investment banking division but instead to pare it back, while retaining the functions needed to serve wealthy individuals and traditional corporate clients.

A source close to Orcel said job losses have yet to be finalized, but investment bankers who spoke to Reuters on condition of anonymity said they fear 15 percent of the advisory division in Europe, or about 75 to 90 people, will be cut.

UBS declined to comment on any plans and said Orcel was not available.   Continued...