A large number of UBS’s London staff will probably have awoken this morning with both a heavy heart and a heavy head, but they can at least console themselves with the notion that it could have been a lot worse for all concerned.
Yes, 10,000 jobs are set to go, the fixed income division is will be wound down and the bank will be lucky if it will find enough people to fill its huge, football field-sized trading floors when it opens its new City office in 2016, but the investment bank could have been a distant memory entirely.
In an interview with the Financial Times, UBS chairman Axel Webber said that shutting down the investment bank had been an option, but that “radical option” was dismissed because it needs an investment bank to “service our clients best”.
Despite the carnage, and the variety of humiliating ways that UBS staff found out they’d been axed (phone messages, e-mails bouncing back, passes no longer working), analysts have welcomed the bank’s bold move.
“UBS has raised the stakes for many wholesale banks to demonstrate quickly they can deliver double digit returns where they compete - or start some intensive pruning,” said Huw van Steenis, analyst at Morgan Stanley.
London is expected to lose 3,000 jobs, 2,500 could go in Switzerland and the US will also be badly affected. Asia, meanwhile, appears to have got off comparatively lightly; just 60 jobs have gone so far, according to the Wall Street Journal, and 30 of these were in Tokyo. Some FICC traders in Singapore are being transferred to wealth management, while Australia has escaped unscathed.
UBS’s fixed income exit is good for the dominant players (Bloomberg)
Kweku Adoboli’s girlfriend convinced him to come clean (Telegraph)
He has now admitted lying to UBS’s compliance department (Financial News)
Barclays has fired some staff over Libor manipulation and reduced compensation for others (Reuters)
If British bankers want to work in Asia, they need to learn Mandarin (Telegraph)
Citigroup has hired a new head of insurance research (Financial News)
Thanks to Sandy, Citigroup’s operations, technology and finance staff in New York will be unable to use their Wall Street office for weeks (Bloomberg)
Large brokerage firms are teaming up rookies with older professionals to reassure clients (Wall Street Journal)
Traders on the NYSE are “basically trading blind” without internet or Bloomberg access (Business Insider)
How one banker responded to Sandy: "I had to go to the wine cellar and find a good bottle of wine and drink it before it goes bad". (Bloomberg)