According to a media report, investment bankers at the «new» UBS must prepare for further layoffs. But they are also having to deal with a paradox: the Swiss megabank has ambitious growth plans for its business.
UBS Investment Bank employees are facing the prospect of further layoffs. Staff at the Swiss banking colossus recently received an internal memo on the matter, as reported by the well-connected «Financial News» portal in London (paid article).
But the scale of the job cuts is unclear. UBS declined to comment further on the memorandum when asked by the portal. UBS’ Swiss investment banking operations, which now include Credit Suisse (CS), are unlikely to be affected as they are being reorganized on a different schedule than the division’s international business.
Moves to Disengage From Switzerland
The Swiss market leader already eliminated dozens of positions in (foreign) investment banking last year, as finews.ch reported. These were mainly former CS employees and executives. During the forced acquisition of its competitor, UBS announced in March 2023 that it would wind down CS trading and reduce the risks from investment banking on its balance sheet to 25 percent. At UBS alone, this stood at around 30 percent at the end of 2022.
In Switzerland, the uncertainties associated with the integration have already led to the departure of several executives from CS Investment Banking.
War Games and Elite Squad
Running counter to the cost-cutting measures, UBS Investment Bank CEO Rob Karofsky (pictured below), who has also been making an appearance at the World Economic Forum in Davos these days, also has growth ambitions for his division. This is primarily in the «traditional» consulting business for companies and in capital market transactions where there are «ambitious strategic plans», as revealed in an internal communication from last December.
(Image: UBS)
Karofsky has also assembled his own elite squad of «deal makers» whose brief is to negotiate directly with the CEOs of companies worldwide.
Climbing Up the Wall Street Hierarchy
UBS also harbors ambitious plans for the investment banking Mecca on Wall Street in New York where the Swiss giant wants to climb to number six, behind American heavyweights like Goldman Sachs and J.P. Morgan.
UBS’ management is also hoping to build a stronger market position in investment banking to gain better access to wealthy U.S. entrepreneurs to serve in its core business of asset management.
