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UBS is one of those banks that catches a lot of crap on the Street these days. I can't make a value judgment about that one way or the other because I've been out of the game for so long, but some of the bank's higher-profile slip ups have added fuel to the fire. Having to settle with the IRS and "out" clients' personal data had to be a bitter pill for any Swiss banker to swallow.

Now the bank is denying last week's news that they're about to spin off their IBD and incorporate it outside Switzerland. That prompted John Carney of CNBC to write this laundry list of the bank's troubles. I have to admit, I laughed out loud when I read that UBS bankers treat the former Paine Webber brokers like "retarded children".

So what's going on over there? There has a been a steady stream of high-level defections over the past couple years, most recently rainmaker Chris Abbate.

Earlier this week, one of the most important bankers at UBS, leveraged finance head Chris Abbate, walked out. Abbate's business of arranging loans to big corporate clients was an important part of building relationships that can win the bank mandates for IPOs and merger deals. He was highly visible to clients. It will be a challenge to win these deals without him.

What happens to UBS from here? Can they get it together and be a force in the market again? Or are they relegated to "also-ran" status on the Street from here on out? And with my sincerest apologies to current and former UBS employees, I just have to quote the Wall Street meme and ask:

Does UBS really suck?

Comments (15)

  • Dibbs's picture

    UBS' problems come up again and again here, but most of this information is oriented towards the american business. Have you guys heard of significant problems like that in the Euro or Pacific zone ? It'd be interested to see what's happening there, where UBS has a significant presence.

    As for the american business, it will be hard to recover quickly from such hits. I think UBS needs to straighten up a couple of things before it can even start of rebuilding. Switzerland is choking them at this point. It's really too bad because they had a good team... I really wonder what it's like on the inside.

  • Bobb's picture

    Culture clash between the swiss and the americans

  • GBB_19NHS's picture

    situation in London seems to be fine at least during the past couple of months.

    "too good to be true"

    See my WSO Blog

  • In reply to Dibbs
    DXX's picture

    Dibbs:
    UBS' problems come up again and again here, but most of this information is oriented towards the american business. Have you guys heard of significant problems like that in the Euro or Pacific zone ? It'd be interested to see what's happening there, where UBS has a significant presence..

    They've been getting hit in EMEA and Asia as well, although not to the extent of the US business.
    In Asia for example, UBS has lost several key rainmakers over the last year or so. Henry Cai (top banker in China) took himself and a bunch of his team over to Deutsche Bank, Matthew Koder (head of global capital markets) went to BAML, Steve Barg (head of asian capital markets) left to GS and Mark Williams (head of asia ECM) left to Nomura.

    Pretty major defections if you ask me...

  • prescient1's picture

    It's been a complete sh!tshow for several years now, and they're just bleeding talent left and right, it seems like people just cant leave that place fast enough.

  • loki276's picture

    Didn't madoff also say UBS should expect a lot of trouble?

  • trade_nrg's picture

    Though the media focuses on defections at all the banks - people often forget that they are being replaced by key hires. In UBS' case, the fact that Rajeev Misra (ex-Deutsche Bank) and Eric Rosen (ex-JPMorgan) are now running credit trading there - both of which are BSD's - is pretty impressive.

    On the IBD front, Citi is taking UBS' people and UBS' is taking Morgan Stanley's people - that seems to be the trend at least.

  • prescient1's picture

    And the exodus continues, UBS Head of M&A and Head of Industrials leave for Citi. I've never seen anything like this, is there going to be anyone left at that bank in a few months?
    http://dealbook.nytimes.com/2011/06/01/citi-hires-...

  • awm55's picture

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  • D M's picture

    "You stop being an asshole when it sucks to be you." -IlliniProgrammer
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