Abigail with attitude: UBS' Ermotti is unmistakably Swiss; JPMorgan is trying too hard
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Abigail with attitude: UBS' Ermotti is unmistakably Swiss; JPMorgan is trying too hard

Anyway, back to Switzerland and the Swiss banks. Things do appear to be stabilizing at UBS. Sergio Ermotti was appointed chief executive in late 2011 and a year later he installed the long-term Merrill Lynch banker Andrea Orcel as head of UBS’s investment bank. UBS underwent an epiphany and scaled its fixed-income division back drastically. The new focus was to be wealth management and corporate finance, which would hopefully flourish untainted by scandals in the fixed-income division. However, in the third quarter of 2013, UBS suffered a setback. The bank announced that it would delay, by at least a year, its aim to reach a 15% group return-on-equity target. This retreat was due to an unexpected demand from the Swiss regulator, Finma, requiring UBS to set aside more capital against "known and unknown litigation".

It was against this backdrop that I met Sergio Ermotti in December 2013. Ermotti comes across as unmistakably Swiss: that seamless blend of urbane yet down to earth, smart but pragmatic, warm but slightly wary. I contrast Ermotti with Credit Suisse chief Dougan, who is as American as apple pie. Ermotti, being Swiss, should have an advantage when it comes to dealing with the Swiss regulators. He literally speaks their language and shares their cultural DNA. That must be an advantage, especially as it is the regulators who are in charge at the moment.

In fact, I could see Ermotti being good not only with regulators but also with clients, as he is outgoing without being bombastic. Ermotti is two years in to the UBS challenge and the transformation is on track. The share price has pirouetted upwards since the restructuring at the investment bank last year and UBS shares now trade at around 1.5 times tangible book value. Ermotti needs UBS’s wealth management clients to regain sufficient confidence to go back into the stock market in a big way during 2014. At the moment, many are still sheltering, shell-shocked, in cash. More fee income in wealth management should mean better revenue and stronger profits for UBS.


JPMorgan endured a miserable year in the limelight during 2013. Whales and regulators didn’t mix well and ended up being very costly for shareholders. So it was perhaps a gesture too far when, last November, JPMorgan’s corporate communications team decided to embrace social media and start tweeting. The bank ended up all of a twitter, with its tail between its legs. The idea was to invite the general public to address questions "on leadership and life" to vice-chairman Jimmy Lee. After a barrage of indignant tweets from the public ("Is it true that, while you don’t always spit on poor people, when you do, you have perfect aim?"), the bank cancelled the forum.

Another own goal was an illustrious function that the bank organized in London, late in 2013, at Buckingham Palace. The event – apparently for clients of the investment bank – was hosted by Prince Andrew, the Duke of York. David Mayhew, who used to chair Cazenove, which JPMorgan bought in 2010, was influential in organizing the event. Apparently, Jamie Dimon, Tony Blair and former UN secretary-general Kofi Annan all attended. "Honestly, what a bunch of free-loaders," my mole sniffed. "Palace staffers should be ashamed: renting out a key monument for commerce. And, let’s face it, Prince Andrew’s track record of promoting British business is controversial. Wasn’t he forced to step down as a trade envoy due to links with dodgy foreign tycoons and lavish foreign travel junkets?" This strikes me as unfair. I’m sure JPMorgan’s guests had a delightful evening. Although, perhaps, the bank is trying a little bit too hard to rehabilitate itself.

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