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To sell or not to sell

Rumours about an impending sale of Warburg Dillon Read have been circulating for over a year, ever since more derivatives losses were announced following the merger with UBS. This year they have resurfaced, despite a healthy performance so far (WDR accounted for 30% of UBS's pre-tax profits for the first nine months of the year, bringing in $1.34 billion). Chase Manhattan, which lacks an equity operation, and Salomon Smith Barney, which lacks a significant European equities operation, have both been touted as buyers.

A couple of months ago there were stories that several senior executives at WDR in forex and rates were being given contracts with UBS rather than Warburg. This prompted speculation that it was the beginning of the end: UBS was taking the best people in preparation for selling the investment bank. Warburg's line on this is that all contracts are ultimately with UBS, but that some have been moved to group level to join Billy Johnson, WDR's head of treasury products, who is now heading up the e-commerce strategy for the whole group.

It might be worth Marcel Ospel having a chat with Martin Taylor if he hasn't already. Taylor had to endure over 18 months of rumours about his selling BZW, and several times had to visit the trading floors to give his assurances personally.