Swiss bank UBS has hired several notable fixed income bankers in recent months. Is the bank getting back into fixed income, which it largely abandoned in 2012?
The move laid the foundation for the Swiss bank's current strategy: four years ago, UBS decided to fire 10,000 bankers and focus on its private bank and a far smaller investment bank.
The investment bank, led by Italian rainmaker Andrea Orcel, was to focus on equities and foreign exchange trading – both historic UBS strengths – as well as corporate advice such as mergers-and-acquisitions.
The bank has made several hires from Goldman Sachs recently which appear to contradict that. Has UBS gotten back into fixed income in a big way?
Goldman, Deutsche Hires
UBS snapped up Ali Sanai in London and Aliza Raffel in New York, sales executives for rates and foreign exchange, respectively, according to «eFinancialCareers».
The hires follow those of Josh Miller, a fixed income salesman, nearly one year ago, as well as Daniel Swasbrook in fixed income distribution two years ago, both from Deutsche Bank.
UBS may be preying on an unhappy work environment at Deutsche, where bonuses have been slashed as part of a wide-ranging restructuring and capital build and more cuts are expected.
Return vs Size
Predictably, the Swiss bank has not cashed in on fixed income perking up in the last few quarters as rivals have – because of its focus elsewhere. If UBS is adding an employee here and there, it can hardly be considered ramping back up from the extremely low fixed income staffing the bank currently has.
Under Orcel, UBS has been focused on returns over size, in an effort to make the best use of the valuable capital the unit has at its disposal. Its return on attributed equity stood at 19.6 percent last year.
