Exclusive: UBS shrinks advisory team for rich in emerging markets

Thu Nov 28, 2013 11:06am EST
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By Katharina Bart and Dinesh Nair

ZURICH/DUBAI (Reuters) - Swiss lender UBS is scaling back corporate advisory and investment banking services for ultra-rich clients in some emerging market countries to reduce overlap with other departments, three sources familiar with the plan said.

The move comes one year after Chief Executive Sergio Ermotti said UBS would let go 10,000 staff and eventually derive profits almost solely from its private banking unit, which caters to the financial needs of the wealthy.

Since then, UBS has cut more than 3,000 jobs, the bulk at its securities unit. At the private bank, where it is not unusual for client relationships to be forged over generations and personalized service is prized, such cuts are far trickier.

The private banking unit being reduced, UBS's Corporate Advisory Group (CAG), offers services such as advice on mergers and acquisitions and initial public offerings, financing options and structured equity products to individuals and entrepreneurs with at least $25 million in investable assets.

The sources said most of the CAG restructuring would take place in emerging markets such as the Middle East, Africa, Turkey and Asia, but did not provide a figure on how many jobs would be eliminated in the move.

"There were overlaps with the normal investment banking operations and it wasn't clear what the CAG staff were doing in certain geographies where there were good investment bankers to execute transactions," one of the sources said.

UBS still employs nearly 2,000 people in Investment Products and Services, a unit led by former investment banker William Kennedy which sells investment bank-style products to its wealthy private clients.

The move comes as UBS fends off demands from Knight Vinke, an activist shareholder, to dispose of its investment bank altogether in order avoid tension with its private bank. UBS has refused to do this.   Continued...

The logo of Swiss bank UBS is seen at a branch office in Zurich October 29, 2013. REUTERS/Arnd Wiegmann