Last week, we announced decisive steps to ensure our future success. We have redefined the business model and ended a long period of review of the Investment Bank. We are core to the Group, uniquely positioned to provide strategic advice, bespoke solutions and best execution to our corporate and institutional clients, while complementing and partnering with our market leading Swiss universal bank, pre-eminent wealth management franchise and diversified global asset management business.
With this announcement, we closed the strategic debate. We recognize refinements in execution are almost always inevitable, particularly when you embark on a rapid transformation such as this. However, our course of direction is clear. It is now time to move forward with a future-focused investment bank that responds to industry, regulatory and economic realities and fits firmly with UBS’s ambitions.
To echo Sergio Ermotti’s remarks, I don’t believe that in order to be successful in business you have to be all things to all people. You must, however, excel at what you do. Going forward we will win if we are client-centric, solutions-based and focused on adding value and leveraging talent, rather than leading with balance sheet.
We are now organized around two client groups:
Corporate Client Solutions
Corporate Client Solutions will include client coverage, advisory, capital market solutions and financing solutions for corporate, financial institutions and sponsor clients.This group is comprised of IBD, ECM, DCM, leveraged finance, SSG and commercial real estate. SFG, structured funding and franchise lending are areas that either support or cut across both Corporate Client Solutions and Investor Client Services and will be managed jointly.
This division will drive approximately one third of total revenues and will use less than 15% of the IB Basel III RWAs.In recognition of the fact that we need to bring our organization as close to our clients as possible, this division will be organized regionally across the Americas, APAC and EMEA. However, given the importance of risk, financing solutions will be led globally.I am therefore pleased to announce, reporting to me:
• David Soanes, Head of EMEA
• Steve Cummings, Head of Americas
• Matthew Grounds, Head of APAC
• Rajeev Misra, Global Head of Financing Solutions
Simon Warshaw will take on a client facing role reporting to me. He will work on certain initiatives focused on further development of the EMEA Corporate Client Solutions business.
Investor Client Services
Investor Client Services will include all trading, post-trade services and wider partnership in the areas of fund investments and distribution capabilities for corporate, institutional investors and UBS’s wealth management clients.
This group is comprised of Equities, FX (incl. Precious Metals)/ Rates and Credit. The group is complemented by our leading global research platform and prime services offerings which are critical in terms of market structure change.This division will drive approximately two thirds of total revenues and will use 85% of the IB RWAs.
I am therefore pleased to announce, reporting to me:
• Mike Stewart, Global Head of Equities
• Chris Vogelgesang and George Athanasopoulos, Global co- Heads of Foreign Exchange and Precious Metals
• Chris Murphy, Global Head of Rates & Credit
Overall, the Investment Bank will now have the following targets, which not only set us firmly apart from any and all of our competitors, but make us the only Basel III compliant bank:
• Return on attributed equity of more than 15%
• Cost income ratio of 65-85%
• Basel III RWAs of less than 70bn Swiss francs
We are now positioned to excel on a global stage in the businesses where we have chosen to compete, and have the resources to invest, from talent through to technology. We will now be in a completely new category to other banks and financial services institutions.With this model we make the most of our strengths, maximize results for clients and add value at every client interaction. We will collaborate across the entire franchise and ensure the Investment Bank is more complementary to Wealth Management, Global Asset Management and our Swiss universal bank.
I will be hosting town halls starting today in London, followed by New York, Zurich and Hong Kong. I look forward to meeting as many of you as possible.
I am confident that by working passionately together, we can establish UBS Investment Bank as a preferred partner to clients and a clear benchmark in the industry.
CEO, Investment Bank