Future of UBS IB?
Where does UBS IB go from here? Groups are bloated with the worst of both UBS and CS and the culture is so much worse than before the merger happened.
Most coverage groups and M&A are exceptionally weak and our rankings in the league tables are embarrassing. We need good MDs who bring in deals, not bad ones who grind juniors on fake work and BS their “pipeline.” Even if market activity picks up in 2025 (like everyone said about H2 2022, 2023, etc LOL), which it actually might, UBS is still not going to outperform where old UBS + old CS combined would be.
It feels like we’re on the bad timeline here… can UBS ever right size the ship?
Based on the most helpful WSO content, here's what you need to know about the future of UBS Investment Banking (IB) post-merger with Credit Suisse (CS):
Current Challenges:
Potential Future Scenarios:
Strategic Focus:
Key Considerations:
Conclusion:
UBS faces significant challenges post-merger, but with strategic focus and effective management, there is potential to right-size the ship and improve performance in the future.
For more detailed discussions and insights, you can refer to the following WSO threads: - https://www.wallstreetoasis.com/forum/investment-banking/growth-of-ubs?…</a">Growth of UBS?? - https://www.wallstreetoasis.com/forum/investment-banking/potential-ubs-…</a">Potential UBS / CS merger
Feel free to explore these threads for more in-depth analysis and community opinions.
Sources: Growth of UBS??, Credit Sussie and UBS weigh merger, Navigating the Choppy Seas | The Daily Peel | 6/13/2023, Growth of UBS??, Is it really THAT bad with Deutsche Bank & UBS?
Issue is our MDs have terrible connections and are unknown. most of them are pretty dorky guys who dont hang out at country clubs/nice restaurants and really have a bad network. they think churning books will bring in deals when in reality they need to be making friends with people (but thats something you need to be doing for decades plus so its too late for most).
Ill summarize with a telling story.
I was eating lunch with my uncle and his friend who is a partner at GS. He was asking what MDs I work with in my group. asked who my group head was.
"I have no idea who any of those people are, never heard of ANY of them!" and when I look at these MDs sitting in their offices all day eating just salad at their desk everyday for lunch.....they dont really have many friends.
This isnt everyone of course (we have some people who DO bring in deals), but we dont have enough of them unfortunately.
Have you or rest of team thought about moving banks?
Agreed, I don't look up to the majority of these MDs, negative examples of being a senior banker
You had me laughing at the eating salads at their desks for lunch part. Spot on.
Salad consumer + No country club presence ? These guys should get a rope and call it a day.
Considering how much people love flexing their personal connections with even competitors, this is a devastating burn
Same here. I'm on the tech team and constantly interviewing because I'm desperately trying to get out. My interviewers don't know the MDs I work with... They know the former head of my group who left after the merger. I had an interview with Goldman and the interviewers were very confused when I described how we run processes at ubs. I thought it was just me but I've realized we're just doing pointless work just to impress clients who will never hire us. All we do is discussion materials providing companies with market updates or other information they already know
Doesn't this to some extent depend on groups? Tech hasn't had any M&A deal flow, but our sponsor's deal flow remains strong. Our GIG and FIG teams also aren't terrible with some decent large-cap EV wins in the past few months. I would agree that all other coverage groups haven't pulled their weight, but there are some coverage groups pulling their weight more than others(I..e sponsors, GIG, and FIG). GIG and FIG are also both huge groups with some bad MDs, but there are some dudes in there with pretty good connections and who have *gasp* actual M&A experience.
Hahahhahahaha 69% of total MD’s are complete dorks. Lot of women in the sample as well
Pretty bad.
What will happen is that they will realise after 2 years that it’s not working and trim IB down globally, very similar to how they have done it many times in the past.
Either that or they make a big investment and radical shift, which given the UBS culture and management will simply not happen.
another super depressing fact is that a ton of seniors of mid level people brought over from barclays are on gaurantees. at VP, ED and MD level theres been so many laterals from there, they will suck up the bonus pool. everyone else is getting a bad bonus now.
Looks more likely each day
Hate to say death spiral...
The Swiss regulators only care about protecting the Retail and Private Wealth businesses. The IB will be retained to service the PW & AM business, but it's never going to compete with US BB.
There is talent at UBS & CS undoubtedly but if the pressure on the top is to cut risk. You aren't going to see huge investment in the IB. Hiring the rainmakers that do deals at the Opera rather than on "Slide 49, table 12" is expensive.
(Tangential story: After '08 the mgmt at CS paid MDs a bonus of in shares in an SPV containing bad credit assets that had nearly taken the bank under. Think CDS, CDOs, HY, etc. Basically a punishment for all the bad risk decisions in the firm. Lots of people were pissed, threatened to leave (not that there were many places to go), normal story. But through 2010-2015 that portfolio recovered like crazy and turned into an absolute goldmine for the MDs left in.)
I think most of the mid/low tier BBs have this problem to some extent. Outside of GS, JP, MS, most of the other large banks are fighting for scraps and doing bitch work for clients.
I am at a mid tier BB and what you described sounds very familiar.
Probably spin off IB and sell it to HL?
¯\_(ツ)_/¯
Idk what you want from us man
More from an APAC context, heard from friends that are juniors (both analysts and interns across UBS and CS), but generally just a shitty position all around. UBS and CS MDs are arguing openly in front of the teams, UBS people not being happy that CS peeps are on their CS (higher) payroll... Lots of bloat all around, even the junior class is unnecessarily large.
Also heard from a VP that general outlook doesn't seem optimistic and they don't exactly know whether to stick it out or leave. Just messy all around. CS used to have good deal flow and has always been strong in APAC for banking, but UBS is a relative laggard. Deal flow has been questionable overall too.
Is this Singapore? Haven't heard about the other stuff, but I was wondering how they were dealing with the CS payscale being higher than UBS - at least they didn't cut the pay of the ex-CS people I guess...
Yes for SG, some are based in HK too - but HK didn't seem THAT problematic from what I'm hearing. Honestly in this market, just gotta be grateful one has a job I guess...
Just got an offer from UBS. Don’t know how to react with all the posts on wso tbh
Would pass if not 100pct comfortable. Jobs should be a mutual fit. Most high quality candidates take these boards with a grain of salt and realize it’s a lot of disaffected / laid off people posting and complaining online.
If you’re seriously considering UBS after reading the posts here, you’re either clueless or just desperate for any offer. High-quality candidates do their research, and it’s no secret that bankers will say whatever it takes to get garbage deals that destroy value done. If you don’t see the red flags by now, you probably deserve what’s coming. The smart ones use these boards because they expose the truth you won’t hear in the interview room. Don’t let yourself get played.
Depends on the group like any bank. I’m in group that transitioned well and has high focus from upper management. Teams done well / solid market share gains this year. Some MDs might not be well connected across other groups (don’t work with them so can’t comment) but head of R&C is certainly not
I think people need to analyze performance across the bank rather than copying what everyone is saying just because some groups are struggling. Consumer and Retail and healthcare have actually closed M&A deals for the first time in seemingly forever (ex. VF Corp - Luxottica deal + Bain - 1440 Foods for CR or even the much smaller recent Buzzfeed deal to spin off their hot ones - not a big deal just more so cool). The HC team was on the CVC-Therakos, and Patterson-Patient Square that was all pretty decent-sized deals) all within the past few months as well. The HC team also has done a decent number of small-ass sell-sides, obviously not the greatest experience for the junior but helps UBS build relationships with sponsors to sell their smaller assets and also still gets you deal experience. Either way, those groups 100% improved from before where they literally had 0 deal flow.
Industrials have been doing much better than before. They were on some of the largest Industrials deals this year including Home Depot-SRS, Arcadium - Rio Tinto, Pactiv-Novolex all 3 of which for instance where 5Bn+ EV deals. They have also been on a good amount of some 1Bn-5Bn deals such as the Terex-Environmental Solutions Group deal.
These are all coverage groups that at very least have markedably improved since last year and it's not even to mention ECM and LevFin which have also drastically increased on the product sized.
Everyone is saying it because its true. You simply have an everyone is wrong alternate universe opinion.
Lackluster performance overall. Healthcare got rid of their group head; likely not for great performance. Same with Rel. The highlight of the tech team, usually 20%+ of an IBS revenue, is an $82mm sell side to a company about to go bankrupt. Hope dozens of tech juniors could work on that one deal to get sell side experience. UBS building relationships with sponsors is the sponsors taking advantage of discounted loans, and rarely giving sell-sides. Industrials has deals but not enough to compensate for the size of the entire bank. Most groups and bankers never see a 5bn+ deal, and get lucky to be invited to the bake-offs aka UBS's ceiling.
Could groups be up with the market being up from last year? Sure. Has the bank lost market share/wallet share overall since last year? Yup. Were each of these banks UBS and CS better off in 2022 and 2021 as seperate entities? Yup.
HC got rid of its group head because of internal politics. Levin became both heads of CR and HC because the dude is a big shot and wants to extend his influence, he is a great MD with most likely a huge guaranteed bonus so he got what he wanted. Is this a sign of a dysfunctional bank at the senior level? Yes, but not a case of firing b/c of performance. Also might actually be fine for deal flow because Levin by himself is a better MD than half of our MDs combined.
HC has a pretty strong pipeline right now from what I've heard from people in the group and they have won a few mandates already on the sell-side (primarily MM ones, and no large ones but hey much better than back in the day with no deal flow and certainly better than tech). I agree on the sponsor's part, but what else is a bank to do? It's all a long-term relationship-building thing and tbf it has worked in some instances (i.e UBS share of deal flow for GTCR for example or even KKR in terms of getting M&A deals has gone up. Yes it hasn't worked everywhere, but can't say it hasn't worked at all).
Dude, can everyone please stop bringing up tech? Tech also made up minimal revenue even pre-merger for UBS... UBS tech hasn't been good for the past 3 years, it's just the same old same old. How can you evaluate UBS on tech when it's not been a driver of revenue for multiple years now? It's also not exactly an alternate universe opinion, speak to people in industrial banking and you'll (correctly) hear that UBS is an improved firm in that field (particularly in paper and packaging + chemicals where UBS has dramatically improved). I never said the bank as a whole is better (it obviously hasn't compared to pro-forma or 2021/2022 data), just pointing out that the integration has been very uneven, and yes some groups have indeed improved.
Please see outside your tech bubble and remember other industries (shocker) exist and are relevant.
Work in consumer at peers - those are league table credits deals lmao
Yeah can tell. UBS is way lower in estimated revenue league tables verus transaction volume league tables. They just beg clients to add them to deals for zero fee, zero work, advisory only league table cred
Better than absolutely nothing which was previously the case. Notice how I said improvement not that groups like HC or consumer are genuinely good groups. The only good coverage group we have is industrials. Sponsors too if you count it as a coverage groups, they are pretty good at winning lead-lefts for LevFin stuff and getting UBS M&A credit.
Its a way for UBS to scam low IQ clients into actually hiring these clowns
So spot on
Imagine all this and consistently 80+ hours for some people
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