An old Morgan Stanley pal of Colm Kelleher has been given what might be the most difficult job that UBS currently has to offer. He has already bailed out the chairman once.
Tom Wipf was among a select group of financial engineers working around the clock in Morgan Stanley's cash room during 2008's financial crisis to ensure it remained liquid. Colm Kelleher was one of those responsible for their sleep deprivation, breathing down their necks in his role as chief financial officer.
Wipf recalled how Kelleher pleaded with them, saying «Look, I just need you guys to get me to Friday.»
That was Then, This is Now
Fifteen years later, Kelleher, now UBS chairman, is once again calling Wipf for help. According to «Bloomberg» (behind paywall) Wipf, who most recently served as vice president of securities trading at Morgan Stanley, has been entrusted to lead the integration of Credit Suisse's business in the US, arguably the most difficult job UBS has to offer.
The job is akin to that of a demolition contractor. At the top of the agenda is to dismantle the Credit Suisse investment bank without causing any damage to UBS or the business. The risks involved are considerable. It's no coincidence that UBS received a loss guarantee of 9 billion Swiss francs ($10 billion) from the Swiss government in connection with the liquidation of a particularly risky portfolio of investment bank assets of the acquired bank.
Major Job Cuts
The Americas are also expected to shed most of the 35,000 jobs UBS plans to cut across the group. Half of the cuts will affect Credit Suisse employees, according to media reports. Investment banking, which operates primarily in the United States, has been the most expensive division with the most employees at the troubled bank. In the first quarter of 2023, the investment bank had 17,000 employees worldwide and posted a pre-tax loss of $1.4 billion.
UBS, meanwhile, has set a goal of reducing risk-weighted assets from investment banking on its overall balance sheet from around 30 percent to 25 percent. The bank also aims to cut $8 billion in costs globally by 2027, including $6 billion in personnel.
(Image: Hell or High Water)
Cultural Filter
Wipf, a longtime investment banker, may indeed be the right man to pore over even the most opaque structures at Credit Suisse's troubled division and sift the remaining investment bankers through the «cultural filter,» as Kelleher put it.
He will be working alongside UBS integration chief Michelle Bereaux, Beatriz Martin Jimenez, in charge of the run-off unit, UBS investment bank chief Rob Karofsky, and Naureen Hassan, who is in charge of the America's business.
In terms of his appearance, Wipf comes across as someone who can't be knocked down in a hurry. He should be been playing guitar (pictured above) for years in a blues band called «Hell Or High Water.» An apt name for the times, come what may.
