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UBS wealth unit revamp gathers pace with 500 jobs set to go

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UBS plans to cut as many as 500 private banking jobs as the lender moves forward with a wealth management overhaul aimed at strengthening regional units and speeding up decision making.

UBS will split up the private banking business in EMEA, giving Caroline Kuhnert responsibility for central and eastern Europe and Ali Janoudi the Middle East and Africa. Christine Novakovic, who has led the entire region until now, will keep Western Europe. To speed up lending to rich clients, UBS also plans to manage loans originated in the wealth unit through a separate risk book in its investment bank.

The changes, outlined in a memo obtained by Bloomberg News, are the latest steps in a broad reorganization of the wealth management business since Iqbal Khan came in to help lead it after his acrimonious split from rival Credit Suisse. He and co-head Tom Naratil were tasked with reviving the division as Chief Executive Officer Sergio Ermotti looks to maintain the bank’s edge and reinvigorate shares that have trailed rivals.

UBS rose 2% at 12:56 p.m. in Zurich. The stock has gained 4.6% in the past 12 months, trailing the 23% gain at Credit Suisse.

The jobs UBS is planning to cut represent about 2% of the workforce in its global wealth management. The bank slashed thousands of investment banking jobs over the past decade in a pivot toward private banking that has become a blueprint for rivals including Credit Suisse. With more firms following in its footsteps, however, competition for clients is increasing. To counter that, Khan and Naratil are looking to do more business with each client and speed up decisions.

Khan pursued a regional strategy with some success when he ran the international wealth management unit at Credit Suisse, splitting his division into seven regions to boost local decision-making. Now he and Naratil are doing the same at UBS, some two years after the bank merged its Americas and global wealth units into a single business.

The changes to how it originates loans to rich clients dismantle a unit within wealth management called Investment Products and Solutions that was the primary engine for coming up with financing structures and investment products. The goal is to eliminate time-consuming negotiations between wealth managers and the investment bank, and speed up approval of loans.

Khan previously indicated that UBS could score “quick wins” by increasing lending, a strategy he also used at Credit Suisse. The bank reiterated a target of $20 billion to $30 billion in net new loans per year.

UBS has made other moves to streamline decision making and remove management layers in the wealth unit. Bloomberg reported last month that UBS was planning to break up the ultra high net worth business and move clients who don’t need investment banking services into existing regional divisions, while those with more complex requirements will be served in the global family office unit.

Other management changes include:

  • Paula Polito, head of global client coverage, will take an advisory role as divisional vice chair for global wealth management
  • Chicco di Stasi will lead structuring and origination outside of the Americas for GWM and act as a link between the investment bank and the wealth management
  • Patrick Grob will lead distribution outside of the Americas for GWM
  • Paul Crisci will develop a private-markets strategy to be implemented across the bank
  • Mark Haefele will lead an expanded chief investment office that incorporates wealth planning and mandates
  • Bruno Marxer, who will run the mandates subdivision, will report to Haefele
  • Christian Wiesendanger, former head of investment platforms and solutions, will stay on as an adviser
Bloomberg News