UBS will need three to five years to fully transform its investment bank under a plan outlined last month, Andrea Orcel, who heads the unit, told staff at town hall-style meetings over the past two weeks, according to two people who heard him speak.
Bloomberg reports that anyone expecting the change to occur in the next couple of quarters will be disappointed, Orcel said, according to the people, who requested anonymity because the meetings were private. The Zurich-based bank will need time to show progress because it won’t be hiring expensive teams from rivals or using its balance sheet to win more business, Orcel said. A UBS official declined to comment.
UBS said last month it will exit most of the capital-intensive fixed-income businesses at the investment bank to boost pretax return on equity to more than 15 percent starting next year. Orcel, 49, was named sole head of the unit, while his former co-chief, Carsten Kengeter, 45, will wind down the debt businesses.
The investment bank is 'core' to UBS, Orcel said at the meetings, adding that details of the strategy for each desk will be ironed out over the next two to three months. He stressed that the review of the investment bank is over and businesses that are kept shouldn’t fear further cuts, although some job reductions may be necessary depending on market conditions.
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image: © William Warby