UBS overhauls flagship wealth unit - report

Switzerland’s UBS Group is shaking up its flagship wealth management arm, including potentially shedding up to 500 jobs, according to a leaked memo.

The bank, the world’s biggest wealth manager, is splitting EMEA private banking into three dedicated regions, according to a memo to staff seen by Bloomberg and Reuters.

Under the reorganisation, Caroline Kuhnert will take responsibility for Central and Eastern Europe, Ali Janoudi will head up the Middle East and Africa, and Christl Novakovic, current head of EMEA private banking, will retain Western Europe.

The wealth management business is UBS’s most important division and has around $2.5trn in invested assets. But global co-heads Iqbal Khan, who joined in October from Credit Suisse, and Tom Naratil have been tasked by UBS chief executive Sergio Ermotti to revive the under-pressure division and ensure it maintains its competitive edge.

Wealth management saw pre-tax profits fall 10% in the first nine months of 2019, as clients around the world, unnerved by the macroeconomic outlook and geopolitical tensions, adopted a more conservative approach to investing. Ultra-low interest rates have also squeezed margins in private banking.

As part of the reorganisation, UBS expects as many as 500 jobs to be lost globally, Bloomberg reported, while wealth management derived loans will now be managed through a separate risk book, thereby reducing time-consuming negotiations between wealth managers and the investment bank.

According to Reuters, the memo stated: "The new approach clients with an enhanced offering, more competitive conditions and faster executive thanks to regionally aligned structuring and origination.

"This will allow us to more easily satisfy client demand and meet our 2018 investor update ambition of $20-30bn in net new loans per year."

As at 1030 GMT, shares in UBS were ahead more than 2%.