The demise and now rise of UBS?

REIkachu's picture
Rank: Baboon | banana points 118

So I just read that UBS is trying to revive its once notorious public finance division by bringing some top dogs from JPM and WF. Is this UBS trying to become more competitive all while they've been shrinking their IB division? Doesn't make much sense. Maybe I should look at some earnings calls.

Pre-crisis:
http://www.nytimes.com/2008/06/06/business/worldbu...
A decade later (paywall):
https://www.bondbuyer.com/news/ubs-taps-hill-genyk...
Interesting to see them start in a mature industry with tight commissions on munis and uncertainty in capitol hill. What do you all think? Strategic or desperate?

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Comments (116)

Nov 22, 2017

If this is really happening, they're making a huge mistake. The pension obligation crisis is accelerating and federal tax reform may exacerbate the situation. I thought they weren't gonna play in debt anymore?. I know they may think tax exempt is synergistic with AM, but the yields/spreads are too small to matter.

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Nov 22, 2017

Public Finance is an area that will always be around. Regardless of the proposals to cut advance refundings and public purpose financings, there's still plenty of money to be made. Yah the PF guys are pulling in $7/bond on AAA credits, but that's still money. I think it's just another avenue for them to make consistent revenue. Bankers can do like 50 GO/Sewer Water Rev deals a year, and when you do volume that shit adds up. That's just my two cents.

Nov 22, 2017

The only reason they would get into the PF business is teeing up to sell the PaineWebber arm of UBS (PF falls under Wealth Management at UBS). Margins are too tiny for anything else to make sense imo.

Nov 22, 2017

I think it'd be the opposite, actually. UBS has been known to try and take the same route MS is taking; to strengthen their wealth management arms and provide better products to their clients. I mean, they are one of the largest private banks and are strong internationally. Could be a way of allowing oversees customers to buy into US markets through munis. But it still seems weird to see them pour resources into a new PF division when their IB has suffered so much from being top 5 pre-crisis

Nov 22, 2017

I think UBS is gonna take a big hit...spin off...not sure...what divisions do you think?

Nov 22, 2017
themilkman:

I think UBS is gonna take a big hit...spin off...not sure...what divisions do you think?

I've seen articles floating around that they may spin off wealth management, but I find that hard to believe. Also they are top 6 in M&A activity so far this year so it seems odd to spin off IBD.

Nov 22, 2017

IMO, if they were to spin off a division it would be their IBD. The bread and butter of the company is their commercial bank in Switzerland and their Wealth Management Division. I believe they have the largest number of financial advisors in the world. This business also tends to stand up better in a recession.

Bloomberg reported today that they may fire 8,000 employees across all divisions.

Nov 22, 2017

UBS = U've Been Split.

Nov 22, 2017

HA HA!

Nov 22, 2017

how long before this happens?

Nov 22, 2017

yea, what are people hearing will happen now?

Nov 22, 2017

I think UBS will eventually be sold to HSBC, whether it'd be their private wealth management or IBD.

Nov 22, 2017

not going to happen, at least based on the impression I'm getting from the internal memos.

Nov 22, 2017

internal memos can say whatever they want... they still split into 3 separate divisions, right? didn't they say the weren't going to do that too? mgmt will do whatever the hell they want w/o having to explain to anyone

Nov 22, 2017

Its always been 3 separate divisions.

Nov 22, 2017

any new thoughts on this after today's developments?

Nov 22, 2017

any new thoughts on this after today's developments?

Nov 22, 2017

They've been partly nationalized, but they won't be the last bank to do so. At the very least they can start returning to business as usual. They turned a profit this quarter, which in and of itself is a feat given the conditions. IMO they're not going anywhere. Maybe they spin out IBD down the road, but right now who's going to take that from them unless it's at firesale prices akin to Wachovia/Lehman/Bear?

I will say this though, I think they would've been wiser taking money from sovereign wealth funds like CS did. The Swiss regulators and that new 9% stake may force them to take some crazy capital restrictions, which would obviously hurt their ability to take advantage of their big balance sheet (which some would say is their strongest asset).

Nov 22, 2017

[quote=gomes3pc]They've been partly nationalized, but they won't be the last bank to do so. At the very least they can start returning to business as usual. They turned a profit this quarter, which in and of itself is a feat given the conditions. quote]

They did NOT turn a profit this quarter.

Nov 22, 2017

the top talent is leaving because they can't get paid - the prize US IB business were Healthcare (IBD), Equities (S&T) and FX.

The latter 2 businesses have seen steady defections since the end of 07 - even before the nationalization wave - because UBS pays bonuses largely based on firm-wide performance, so Rates/FX/Equities/High Grade got paid shit, just like HY/LevFin bankers/mortgage and structuring desks.

Most of my friends in UBS IBD are/were in LevFin, FIG, and Industrials, so I'm not sure how healthcare is doing (although they lost an analyst from the 07 class in fine fashion, remember that great exit letter?).

I'd say the American investment bank is done for - they'll eventually sell off divisions to garner what value they can before people quit. Wealth/Investment Mgmt will maintain a strong global presence, and IB will be moderately strong outside the US.

Nov 22, 2017
yesman:

I'd say the American investment bank is done for - they'll eventually sell off divisions to garner what value they can before people quit. Wealth/Investment Mgmt will maintain a strong global presence, and IB will be moderately strong outside the US.

You do know that the groups in NY are global, right? They handle deals all over the world...I believe that makes a difference.

Nov 22, 2017
rightplacewrongtime:
yesman:

I'd say the American investment bank is done for - they'll eventually sell off divisions to garner what value they can before people quit. Wealth/Investment Mgmt will maintain a strong global presence, and IB will be moderately strong outside the US.

You do know that the groups in NY are global, right? They handle deals all over the world...I believe that makes a difference.

Just because the team names have global in them doesnt mean they work on global mandates, they are quite focused on the US actually. Teams in asia and europe area also called "Global [fill space] Group" . and its most definitely not the global HQ.

Nov 22, 2017

UBS's global IB HQ is in London. Most of their mandates are in Europe or Asia. IBD-wise they are struggling in the US.

Just my 2c.

Just my 2c.

Nov 22, 2017

The surprising thing is that DB has so much money to throw around. They've been hiring right, left and centre.

All banks that have been crunched are bleeding people (ML, Citi), so it's not a UBS-specific phenomenon. Although, the 80% fall in bonuses didn't help either.

UBS have, historically, been known to buy the top talent when they need it, so don't worry, when the markets turn around uncle UBS will make sure that the ranks of rainmakers are full again.

With regards to the junior bankers, I have no idea. A lot depends on the future market conditions.

Just my 2c.

Just my 2c.

Nov 22, 2017

I see it as an opportunity to junior bankers in the future ---> there will be the need for senior people in 5 or 7 years, so who is starting now has a good chance to get these positions (also consider that some of these senior guys are taking or will take this opportunity to open their very own boutique bank - like happened in the past when these M&A cycles were down)....

Nov 22, 2017

some of the senior guys in your coverage groups are locked in... some are not. even if everyone who isn't locked in were to leave, which they won't... there would still be a need for you to start this summer and hang out long enough to figure out what to do with your life

Nov 22, 2017

delete

Nov 22, 2017

cool story bro. but , repost.

Nov 22, 2017

FUCK! FUCK! FUCKING FUCK! I HATE MY LIFE! I AM SO WORTHLESS!

Nov 22, 2017

that is 2 days old

Nov 22, 2017

@whateverittakes do you work at UBS?

Nov 22, 2017
Nov 22, 2017
awm55:

http://news.hereisthecity.com/2011/05/05/rumours-o...

+1. I was about to post that. Can't put all that much value on rumors and chatter among little pre-pubescent boys on internet forums. UBS is a bulge bracket bank, no matter how you slice it. At this point in time there's no indication that they're going the way of the dinosaurs to say the least.

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."

Nov 22, 2017

well it has been a while since i was pre, or even recently-post pubescent. Hereisthecity is based in london and tends to be eurocentric. I think most ubs haters would even acknowledge the strength of the brand in Europe, and many of the hires that article touts are in the Eurozone.

But, that article is taking a short-term view of a problem that has been going on for a while. Yes there were some big singular losses (though they excluded the the head of comm banking leaving to go back to CS 2 weeks ago) and apparently some hires to fill some voids, but they seem to ignore the fact that entire teams that have left in the last 2 years (energy, healthcare,,,). Those are things that have not been corrected, and a few hires in Austria aren't going to do it.

Not saying they're dead by any means, but i don't think the exodus, especially in the US, have been exaggerated.

Nov 22, 2017

I think at this point you are not just beating a dead horse - you are beating off a dead horse

More is good, all is better

Nov 22, 2017
Argonaut:

I think at this point you are not just beating a dead horse - you are beating off a dead horse

Very contrived. Normally, your repartee is funny.

I don't think UBS really is a dead horse. Can't we all appreciate some fucking hyperbole every now and then? Had things turned out differently and I only received an offer from UBS, I would have gladly taken it.

Nov 22, 2017

i'd say beating off a dead horse is an even better metaphor for the futility of an effort than beating a dead horse.
So CAN you appreciate a f-ing hyperbole?

It looks like the topic is a personal one for you; why don't you tell your story instead of reposting links from the internetz and expecting us to understand why you feel so worthless, or why this is of such interest to you.

More is good, all is better

Nov 22, 2017

Wanna fight, bro?

Nov 22, 2017
whateverittakes:

Wanna fight, bro?

No. Because even though you are the one starting, I would probably be the one getting assault charges for beating you to a pulp.

More is good, all is better

Nov 22, 2017
Argonaut:
whateverittakes:

Wanna fight, bro?

even though you are the one starting

That's debatable.

Nov 22, 2017

DP

More is good, all is better

Nov 22, 2017
whateverittakes:
Argonaut:
whateverittakes:

Wanna fight, bro?


even though you are the one starting

That's debatable.

how is that debatable? I am even against your violence aimed at the dead horse.

More is good, all is better

Nov 22, 2017
Argonaut:
whateverittakes:
Argonaut:
whateverittakes:

Wanna fight, bro?

even though you are the one starting

That's debatable.

how is that debatable? I am even against your violence aimed at the dead horse.

I think you're beating a dead horse with all those dead horse metaphors.

Nov 22, 2017

I feel like UBS is having a hard time in IB. I don't really know how it was before the crisis but now UBS is clearly lagging behind its competitors in IB.

If you look at this link, you'll see that UBS revenues are significantly smaller than any other BB (apart from MS, any explanation on that ?)

http://www.efinancialnews.com/gallery/in-pictures-...
And it also shows that GS is still above everyone else in the street in term of size. I don't really know if the same activities within each bank are taken into account in these numbers though.

Nov 22, 2017

Dollyship...great link from Q1 2010...Thanks for your contribution.

Nov 22, 2017

Are you trying to join in on the fun?

More is good, all is better

Nov 22, 2017
Argonaut:

Are you trying to join in on the fun?

[/embed]
This had me rolling man. Real wild

Still I Rise

Nov 22, 2017

UBS was pretty decent before the crisis. I think they're just having a hard time trying to get their mojo on post crisis.

Still I Rise

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Nov 22, 2017

It's not Citi nor BAML's fault that UBS bankers are defecting, are you kidding me...

Nov 22, 2017

I actually just talked to a buddy of mine at UBS this afternoon to see what the hell is going on over there, the wheels are apparently starting to fall off. He said on a typical day over the past month, up to half his entire group, from senior MDs right on down to 1Y analysts, wont even be in the office because they're out interviewing at other banks. Its apparently so commonplace, people just accept it now.

Nov 22, 2017
prescient1:

I actually just talked to a buddy of mine at UBS this afternoon to see what the hell is going on over there, the wheels are apparently starting to fall off. He said on a typical day over the past month, up to half his entire group, from senior MDs right on down to 1Y analysts, wont even be in the office because they're out interviewing at other banks. Its apparently so commonplace, people just accept it now.

That's just sad! I wonder though why type of questions would MDs get asked at the interviews?
2011 is going to be a bad year for sure for UBS, but it should rebound in the next couple of years. My gut feeling tells me that just can't be the next HSBC.

Nov 22, 2017
prescient1:

I actually just talked to a buddy of mine at UBS this afternoon to see what the hell is going on over there, the wheels are apparently starting to fall off. He said on a typical day over the past month, up to half his entire group, from senior MDs right on down to 1Y analysts, wont even be in the office because they're out interviewing at other banks. Its apparently so commonplace, people just accept it now.

I have always wondered this. What happens if it gets this bad? I mean how can you run a business that requires this much dedication if people know they aren't going to get paid well for the job they do?

UBS was moronic for not paying well this year, they knew their top guys would get poached and now they are in the position of having to give enormous guarantees to get people to come over from other banks (god knows how much they had to pay to get the energy team from MS). All this does is reduce the bonus pool for everyone else.

Of the main investment banks they are BY FAR the best capitalized, so they have the resources to pay but they just don't seem to be ponying up. Not a good idea in this industry.

Nov 22, 2017

Lol 1Y analysts are probably recruiting for PE positions and not for Jefferies. Can't speak for the MDs.

That being said, http://nyti.ms/kjuPSZ says they picked up a dealmaker from DB, and http://dealbook.nytimes.com/2011/05/25/ubs-hires-2... a couple more higher level people from MS that followed Langford over to UBS.

Banking is a revolving door lol. Situation at UBS is pretty meh compared to that at JPM, but it seems the people most concerned are senior staff at UBS over pay and WSO monkeys who don't have jobs in the industry/want to make their job at Jefferies/Piper/HSBC/MacCap look "bulge bracket." At the end of the day, "prospective" BBs never really join/joined the ranks, while "struggling" BBs never left them unless they sold out to another firm.

Nov 22, 2017

That would be incorrect, my group alone has received 20-30 resumes from UBS over the past month or two from analysts trying to lateral out. To your claim more broadly, no, a stampede for the exit sign of this magnitude does not happen at other banks. Its cute you're trying to defend your bank, but this is a situation that is very uncommon, why else do you think the WSJ and Dealbook have deemed it so bizarre they've each run multiple articles calling it a "mass exodus"? The upshot is that prospective monkeys on this board would be well-advised to avoid starting their career at a sinkhole like this.

Nov 22, 2017
Nov 22, 2017
awp:

http://dealbook.nytimes.com/2011/06/03/ubs-hires-t...

Hahaha, is this a joke? One no name banker from a 2nd tier bank like DB is a drop in the ocean compared to the legions of very high profile senior level bankers that have left UBS.

Nov 22, 2017
bankerspi314:
awp:

http://dealbook.nytimes.com/2011/06/03/ubs-hires-t...

Hahaha, is this a joke? One no name banker from a 2nd tier bank like DB is a drop in the ocean compared to the legions of very high profile senior level bankers that have left UBS.

Well they also snagged three top guys from MS energy which is about as high profile as you can get.

Nov 22, 2017

wow sounds like ubs is really going down the shitter

Nov 22, 2017

Yeah it certainly seems like people are heading for the hills over there, crazy stuff. I have a few college buds over there and it sounds like everyone who can is trying to lateral out.

Nov 22, 2017

I think its a domino-effect dynamic thats taken root over there; people see everyone around them leaving and before you know it you have entire teams of people (like their whole Healthcare group) peacing out.

Nov 22, 2017

i thought they are doing quite well...
http://graphicsweb.wsj.com/documents/INVESTMENT/In...
in many aspects they are improving..

Nov 22, 2017

I'd be pissed if I were a UBS shareholder... why isnt the management paying more?

Nov 22, 2017

UBS is already the bank paying the highest share of its revenue as comp.

Nov 22, 2017

One of my friends interned @ healthcare last summer, and she'll be joining FT this year in the same group. this is sad.

Nov 22, 2017

Their synthetic equities team has been doing well..

Nov 22, 2017

Due to the recent scandal there will be some major restructuring going on... meaning that they are going to shrink their investment banking arm and focus on their private banking and wealth management services... I can imagine that recruiting will be a real bitch...

Nov 22, 2017

I have a couple of friends that work(ed) in their US group. I would suggest staying away as there is alot of uncertainty surrounding their employment status, compensation, and the bank's ability to generate new work due to the scandals. If you can't get in anywhere else, a BB is still a BB. That being said I would plan for a swift exit once you start networking.

Nov 22, 2017
Nov 22, 2017

I'm hearing HSBC is pretty well-establised in Asia. Citigroup is probably your best bet out of the three you mentioned... and yes. boutique over UBS

Nov 22, 2017
nauprillion:

I'm hearing HSBC is pretty well-establised in Asia. Citigroup is probably your best bet out of the three you mentioned... and yes. boutique over UBS

1 year ago, UBS was def tier 1 BB in Asia Pacific, while HSBC was at most at 2nd/ 3nd tier BB. I totally agree there is uncertainty regarding the investment banking division in the future. However, based on its last several months performance/ league table in Asia Pacific, UBS IBD still remians as top 3 BB.

Nov 22, 2017
non-target <abbr title=bulge bracket>BB</abbr> Banker:
nauprillion:

I'm hearing HSBC is pretty well-establised in Asia. Citigroup is probably your best bet out of the three you mentioned... and yes. boutique over UBS

1 year ago, UBS was def tier 1 BB in Asia Pacific, while HSBC was at most at 2nd/ 3nd tier BB. I totally agree there is uncertainty regarding the investment banking division in the future. However, based on its last several months performance/ league table in Asia Pacific, UBS IBD still remians as top 3 BB.

I meant HSBC as a whole. The retail business etc is going to become increasingly important and that is where HSBC's strenght lies. UBS is likely to do better on the higher end though (reknowned private banking and wealth managment unit).
I agree, UBS' Asia operations are top notch.

Nov 22, 2017
non-target <abbr title=bulge bracket>BB</abbr> Banker:
nauprillion:

I'm hearing HSBC is pretty well-establised in Asia. Citigroup is probably your best bet out of the three you mentioned... and yes. boutique over UBS

1 year ago, UBS was def tier 1 BB in Asia Pacific, while HSBC was at most at 2nd/ 3nd tier BB. I totally agree there is uncertainty regarding the investment banking division in the future. However, based on its last several months performance/ league table in Asia Pacific, UBS IBD still remians as top 3 BB.

Hey, very nice of you to help! Just had a couple quick follow-up questions:

1.) What kind of school did you go to?
2.) What kind of bank do you work for?

.

Nov 22, 2017

For UBS specifically, I would definitely NOT apply to their IBD division, but go for AM / PWM, for the reasons mentioned (i.e. shrinking IBD, focus on AM/PWM).

The rest of the questions depend a lot on desk / division, but a good GENERAL rule of thumb is go for the best name (in like-for-like situations). For example, if you had AM UBS and AM HSBC, I would say UBS, but obviously it depends on what your career aspirations are, what group you want to be in etc.

Nov 22, 2017

It's a rotting carcass. Best to stay away until their future firms up. Only reason you shouldn't is if ur currently jobless. They are really in a death spiral with a crisis of leadership.

Nov 22, 2017

UBS sucks.

  • frequent dealbreaker reader/commenter
Nov 22, 2017

UBS is a great bank. I would choose it over evercore and greenhill

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.

Nov 22, 2017

UBS in London is still top flight. UBS in the US is falling apart though..

Nov 22, 2017

Uhh...what?

Where do you see the "connection" between UBS and CS, other than both banks happen to be Swiss? UBS has been cited for terrible management at the top: buying lots of assets to build up the firm during boom years and now facing the consequences of being a colossal firm in a down cycle. Also as has been mentioned on this forum before, they hired far too many in the boom years and go on firing sprees during low markets.

So certainly UBS is a cautionary tale for the other banks. But again, fail to see how they are particularly similar to CS...? Obviously the concern of a balance sheet is tangible for CS, but they have been among the top-5 for global M&A for a while, are leading in emerging markets, and lead IPO underwritings in 2012.

Your question (IMO) is akin to asking if Citi/BAML fails, why not GS/MS!? They are all American banks and GS/MS don't have that big balance sheet like JPM (OMG!).

Nov 22, 2017
mountainvalley:

Uhh...what?

Where do you see the "connection" between UBS and CS, other than both banks happen to be Swiss? UBS has been cited for terrible management at the top: buying lots of assets to build up the firm during boom years and now facing the consequences of being a colossal firm in a down cycle. Also as has been mentioned on this forum before, they hired far too many in the boom years and go on firing sprees during low markets.

So certainly UBS is a cautionary tale for the other banks. But again, fail to see how they are particularly similar to CS...? Obviously the concern of a balance sheet is tangible for CS, but they have been among the top-5 for global M&A for a while, are leading in emerging markets, and lead IPO underwritings in 2012.

Your question (IMO) is akin to asking if Citi/BAML fails, why not GS/MS!? They are all American banks and GS/MS don't have that big balance sheet like JPM (OMG!).

Think the demise of UBS is overdone in the media. It's still the #2 wealth manager globally. It is still the #1 bank in Asia for IBD/ECM and solid for DCM (think #4) there. Still solid in Europe. The US is the big weakness really. Equities still doing reasonable on par with DB, etc... and fixed income actually still exists (albeit less complex) post the restructuring.

Nov 22, 2017

FYI- and as mentioned above, UBS is experiencing the consequences of over-hiring and now they are cutting staff that the bank's performance has gone down. They are really experiencing the biggest problems in the US, and they continue to have solid (not great) performance in Europe and Asia. Wouldn't think there is much of a connection between them and CS.

Nov 22, 2017

Totally understand the GS/MS argument with Citi/BAML, but my fear is that UBS/CS are more closely tied given that the economy of Switzerland is more heavily reliant on banking as a whole. I would tend to say in the US it's not as big an issue. Not trying to make any statements whatsoever, just looking for info. I'm starting full time at CS this summer, and just wanted to see what people thought. Thanks for the responses.

Nov 22, 2017

I don't think this fellow knows what he's talking about.

Nov 22, 2017

It is actually a valid question in at least two ways. 1) that the Swiss regulator has been unusually focused on Credit Suisse, ostensibly for bringing greater risk into a more conservative, wealth management-oriented Swiss banking system; they are still finding it hard to digest that a non German-speaking American is the CEO and 2) that after the pop in UBS's share price, investors may pressure Credit Suisse into delivering similar results (their share price, as with most investment banking firms, has been lagging).

The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be the shepherd.

Nov 22, 2017

bump

Nov 22, 2017

UBS now = CS in 3-5 years. The structural and regulatory issues facing both are identical.

mountainvalley, the fact they are both Swiss *is* incredibly relevant.

Nov 22, 2017

I will keep a lookout for other opportunities if I were you. Regardless of what people on this board tell you (that UBS is too big to fail, and will always be a BB blah blah blah - that kind of shit obviously comes from UBS analysts), UBS IBD is now fraught with uncertainty.

That bank's like a black hole now. A few months ago, there were saying that IBD is a core part of their business. Now they are saying that IBD will be reduced substantially in size and product lines. Who knows what happens in a few more months? Maybe shut the entire IBD down with pink slips all around?

Nov 22, 2017

One of my friends who's going to be FT at UBS LA is looking around right now just in case. I honestly don't know whether he's being smart or paranoid.

Nov 22, 2017

Based on UBS' recent statements, it's difficult to pinpoint what exactly they mean when they reference "the investment bank." When UBS references its investment bank, it is talking about IBD** AND all the capital markets functions (S&T, prime brokerage, derivatives, etc...)The wording leads me to believe that the proposed withdrawal from "investment banking" actually means:
- put the brakes on proprietary trading
- partially/entirely withdraw from structuring exotic fixed income products
- reduce IBD headcount to match the decline in market-wide dealflow (as all banks are doing)

**To be clear, I'm using the term "IBD" to describe sector coverage, M&A advisory, and equity/debt/LevFin/etc product activity.

To address the OP's question: I'm not sure who on this forum is interpreting UBS' treatment of "IBD" vs "Investment Banking" correctly. Delirium2 is correct to point out that there is clearly a shitshow at UBS right now. However, think the most recent announcements signal substantial layoffs in trading and structuring functions but seem to indicate that IBD sector/product activity (what your friend will find at UBS LA) will experience milder layoffs.

Nov 22, 2017

Bury Bonds, I could not agree more that it sounds like they realize their losses stemmed from a small part of the business, and they are going to pull back on that. They surely understand that doing IPO and M&A work is profitable for them.

But I wonder how much dealflow will slow if they get worse about using capital to attract business (why Moelis left), or about underwriting debt deals. And also, how a spinoff would affect an analysts' experience there. Do you think that 2 years down the road, PE firms and HFs will still look favorably upon UBS analysts, and realize that it was just unlucky timing?

Another thing: I don't think a spinoff of the bank would be too bad for bankers if done properly and good leadership is put in place. But what are the chances it is sold to a competitor BSC-style?

Any and all opinions are appreciated.

Nov 22, 2017

Those are questions that I obviously don't have concrete answers for. My comments:

re: Dealflow and capital usage
If I recall correctly, the one place they seemed over-reluctant to deploy capital was leveraged loans. That decision turned out for the best. Using capital to win deals will still go on. For example, the recent KCI/LifeCell deal ($1.7B) was a cash deal and I'll bet that a decent chunk of JP Morgan's change was involved somewhere along the way. However, this is nothing like last year when banks were effectively buying league table cred via massive LevFin commitments (if you want a neat example, read up on the package Credit Suisse offered in the hopes of attracting a rival bidder for TXU last year). If your friend is joining a group that has a strategic M&A focus (as opposed to sponsor-driven/financial M&A), then he probably has less to worry about.

re: Spinoff
I don't work there, so I am only going by what I read. The consensus seems to be that the investment bank could not be carved out because it wouldn't be adequately capitalized. Divesting it to competitor is probably impossible at the moment given that it would require substantial appetite and funding on the part of the buyer (neither of which seem to exist right now).

re: Exit opps
If the analysts are still getting decent deal experience, I would venture to guess that opps will not be massively compromised in the near future.

Nov 22, 2017
Bury_Bonds:

Those are questions that I obviously don't have concrete answers for. My comments:

re: Dealflow and capital usage
If I recall correctly, the one place they seemed over-reluctant to deploy capital was leveraged loans. That decision turned out for the best. Using capital to win deals will still go on. For example, the recent KCI/LifeCell deal ($1.7B) was a cash deal and I'll bet that a decent chunk of JP Morgan's change was involved somewhere along the way. However, this is nothing like last year when banks were effectively buying league table cred via massive LevFin commitments (if you want a neat example, read up on the package Credit Suisse offered in the hopes of attracting a rival bidder for TXU last year). If your friend is joining a group that has a strategic M&A focus (as opposed to sponsor-driven/financial M&A), then he probably has less to worry about.

re: Spinoff
I don't work there, so I am only going by what I read. The consensus seems to be that the investment bank could not be carved out because it wouldn't be adequately capitalized. Divesting it to competitor is probably impossible at the moment given that it would require substantial appetite and funding on the part of the buyer (neither of which seem to exist right now).

re: Exit opps
If the analysts are still getting decent deal experience, I would venture to guess that opps will not be massively compromised in the near future.

are you saying that industry groups would likely to be better off?

Nov 22, 2017

A rumor that I heard from several senior people is that HSBC is involved with Olivant. Nobody knows to what extent. Whether their role is simply as a generic prime broker or whether they have some sort of interest in parts of UBS remains to be seen.

A good deal of people at UBS are taking a look at their options. I said it yesterday, but I'll say it again. Uncertainity at the bank makes it extremely hard for them to retain and recruit talent. Yes, it is a horrible job market right now, but everyone on all levels are checking out their options.

I agree with Bury_Bonds in that the "Investment Bank" and IBD are quite different. Headcounts will be reduced, but the severity will depend on the divisions and its contribution to the current situation.

One last note: There was a good deal of reaction to Rohner's comment that the PW/AM/CB would no longer subsidize/finance the operations of the IB. Many people took that to mean a seperation or a major cut in products. If you read UBS report on their subprime losses published on Monday you will understand how the losses were created. Basically (I am not a trader) it was a carry trade financed by a low cost of funds (swiss deposits..ect) which bought higher yielding but risk free assets (by selling the first 2% of losses) and immediately generated profit at a risk free return (cough cough LTCM). They did this on such a huge scale and over several divisions and managed credit but not market risk, and this was their main flaw. From what I took of it, this scheme was being shot down by Rohner in his comments and does not nessecarily mean as draconian cuts as some believe.

Nov 22, 2017

Could be better.

Nov 22, 2017

Too early to tell. 2010 will be crucial. If they are not out of the woods then (in terms of it's WM - no-one gives a shit about IB or WM US any more) then road to recovery will be painful, very slow and UBS will lose what is left of its prestige and clout. Then they will be known as the poster child of the credit crunch as WM was considered to be the money machine that would be working no matter happened to the world or IB, but as the 50% drop in it's WM arm show, that is painfully not the case. If in 2010 they post a profit, get some inflows in WM, WM US and GAM then they'll rebound into top league just as they have post LTCM. But in all Q3 result really means nothing in terms of UBS outlook, just that we'll have to wait a little longer till we get to the cross-roads.

Just my 2c.

Nov 22, 2017

UBS is exiting its U.S. operations. Sure if you wanna be in Europe or Asia, it's a fine bank, i sure wouldn't do anything with it for the long term in the united states though. rather work at JEFFRIES ROFL

Nov 22, 2017

in before 6 page thread.

Nov 22, 2017

There's literally an identical thread posted yesterday that's still active.

http://www.wallstreetoasis.com/forums/why-is-ubs-n...

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."

Nov 22, 2017

How hard can you troll?

Nov 22, 2017

It's a BBB. No, wait, it's a AA. abcd?

Yes, it's a BB.

Get busy living

Nov 22, 2017

If you haven't see anything new on it you haven't looked. This was widely documented and reported.

Go to their investor relations website and they'll show you which areas of the IB are staying and which are going. It boils down to this - they're mostly scaling down prop trading, and other types of trading. Most core trading and IB groups (M&A, LevFin, Corp Lending, etc etc etc) Are staying and may even grow.

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Nov 22, 2017

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"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

Nov 22, 2017