The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Sergio Ermotti: Reshaping UBS

By cutting back its investment bank sharply, UBS chief executive Sergio Ermotti has laid down a challenge to competitors. It now seems that the private bankers wielding power at the top of UBS want to keep fair chunks of the investment bank. Has Ermotti found the keys to a resurgent UBS?

The 30% three-month rise in UBS’s share price to mid-January, following the announcement at the end of October 2012 of a radical reshaping of the group, with a sharp reduction in capital allocated to its investment bank and in particular the fixed-income business, marks a notable outperformance even as the whole sector has rallied.

Over the same period, the Bloomberg Europe 500 banks and financial services index was also up strongly, but UBS’s performance puts the index’s 15% rally in the shade.

UBS is transforming its investment story to investors. For much of the past decade, that story has been dominated by its large, scandal-plagued and only patchily performing investment bank. In future, there is no doubt where the power lies: as a leading global wealth manager with a bedrock, cash-generating Swiss business, in which a trimmed-down in-house investment bank, two-thirds smaller than it once was, plays only a supporting role.

Analysts appear to love the idea of the new UBS. The bank is doing exactly what investors and regulators want, cleaning up past mistakes, abandoning ambitions to compete in businesses rendered unprofitable by new regulatory capital and leverage constraints, and shrinking back to its core strengths.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree