UBS announces major reorganisation

Switzerland's largest bank, UBS, has announced a major reorganisation of its structure, designed to unlock the banking giant's growth potential. Analysts say the move is designed to create a leaner and more streamlined organisation.

Switzerland’s largest bank, UBS, has announced a major reorganisation of its structure, designed to unlock the banking giant’s growth potential. Analysts say the move is designed to create a leaner and more streamlined organisation.

Private banking, which has faced problems expanding its business, is to be merged with the division UBS Switzerland headed by Stephan Haeringer. Georges Gagnebin, currently head of UBS’s international private banking activities, will become the CEO of private banking.

Under the moves, the present head of private banking, Rudi Bogni, is set to leave. UBS Switzerland will be composed of two divisions: private and corporate clients and onshore and offshore private banking services.

In addition to UBS Switzerland, the bank will have two other business groups: UBS Asset Management and UBS Warburg.

UBS Warburg will retain the existing organisational structure of the securities and investment banking businesses. Corporate finance, equities, fixed income and treasury products will be joined under one roof by private equity, international on-shore private banking and e-services.

UBS Asset Management will concentrate all the investment management businesses of the group under the leadership of Peter Wuffli. UBS says the aim is to develop a ‘client-centric’ approach, including strategic asset allocation.

UBS spokesman, Christophe Meier told Swiss Radio International the re-organisation was necessary.

‘The financial services industry is radically changing’, he said, ‘and banks have to think about client segmentation because the client nowadays can choose how to approach the bank. Up to now, we had a structure that was created in the mid-90s with five divisions and we are convinced that isn’t modern enough.’

UBS is the world’s largest private banking organisation, with assets under management totalling more than SFr 640 billion ($396 billion). Together with the asset management side of the business, it has more than SFr 1.6 trillion francs under its management.

Hints of a possible merger have circled the bank recently and some analysts see the reorganisation as a response to the rumour-mill.

There was certainly a bullish mood among UBS management as the announcement was made. ‘UBS will possess the agility to respond fast to changing client demands, allowing us to increase our momentum significantly’ said the group’s chief executive officer, Marcel Ospel. ‘The growth potential of UBS is tremendous. We now have a thoroughly modern, rationalised structure to match our aspirations.’

By Michael Hollingdale