UBS Shows Miskovic the Door, Shakes Up European Operations

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Change is in the air for UBS (NYSE:UBS), with newly appointed group CEO Sergio Ermotti initiating changes at various levels across the largest Swiss bank within weeks of taking up the reins. The banking group announced a top-level reorganization yesterday, with Maureen Miskovic ousted from her job as the group’s Chief Risk Officer (CRO). [1] Philip Lofts, who was the group’s CRO until Dec 2010 when Miskovic took over the job, will go back to his old role. Robert McCann has been given additional responsibilities as UBS Group Americas’ CEO, while the group’s COO Ulrich Körner will shoulder the additional responsibility of being the CEO of UBS Group Europe, Middle East and Africa. UBS also announced its decision to merge its onshore and offshore European businesses into a single unit. [2] UBS and its Swiss competitor Credit Suisse (NYSE:CS) are expected to revamp their businesses significantly in the near-term in order to comply with various sustainability requirements laid out by Swiss authorities.

We have a $20 price estimate for UBS’s stock, which we are currently revisiting given the current macroeconomic conditions.

See our full analysis for UBS

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UBS’s decision to let Miskovic go was in the cards for quite some time, as she was the group’s CRO when the unauthorized trading incident that cost UBS $2.3 billion was reported. Although then-CEO Oswald Grübel assumed responsibility for the loss and resigned, it still certainly tarnished Misckovic’s reputation.

As for the group’s decision to unite its European business into a single private banking unit, the move was triggered by the fact that the onshore business is becoming profitable so there is no longer a need to manage it separately from the established offshore European business. UBS’s onshore European business was formed to meet the demands of wealthy European clients who wanted their banking needs catered to at home – rather than offshore from Switzerland. The European business is detailed by UBS in its reports as its wealth management business for international clients, and managed more than $550 billion in client assets at the end of Q3 2011.

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Notes:
  1. UBS announces leadership changes, UBS Press Releases, Dec 1 2011 []
  2. UBS streamlines European onshore, offshore private banks, Reuters, Dec 1 2011 []