UBS shrinks corporate advisory team for rich in emerging markets

UBS shrinks corporate advisory team for rich in emerging markets

5:50am EST

By Katharina Bart and Dinesh Nair

ZURICH/DUBAI (Reuters) – Swiss lender UBS is scaling back corporate advisory and investment banking services for ultra-rich clients in some key emerging market countries to reduce overlaps with other departments, three sources familiar with the plan said. The bank’s Corporate Advisory Group (CAG) offers services such as advice on mergers and acquisitions (M&A) and initial public offerings (IPOs), financing options and structured equity products to ultra-high-net-worth individuals and entrepreneurs who were the bank’s wealth management customers.Ultra-high-net-worth individuals typically have investable assets of at least $25 million.

The sources said most of the CAG restructuring would take place in emerging markets such as the Middle East, Africa, Turkey and Asia, but did not provide a figure on how many jobs would be eliminated in the move.

“There were overlaps with the normal investment banking operations and it wasn’t clear what the CAG staff were doing in certain geographies where there were good investment bankers to execute transactions,” one of the sources said.

The unit, which employed nearly 80 bankers across 15 offices, essentially acted as an interface between the bank’s wealth management and investment banking operations.

After the restructuring it will only offer advice on corporate finance activities, while the “execution” part will be done by the bank’s investment bankers, the sources said, requesting anonymity as the matter had not been made public.

The sources said clients in the region where the unit has been scaled back will continue to be served by existing local wealth management staff, while the bank’s investment banking team will pitch for any deals-related requirement of the clients.

UBS declined to comment.

Switzerland’s largest bank by assets has overhauled itself following the financial crisis and a series of high-profile scandals, abandoning risky fixed-income activities, hiving off loans and raising capital to restore its reputation.

Last October, UBS said it would cut spending, let go 10,000 staff and largely withdraw from its fixed-income business by 2015 as part of a restructuring drive to return to profitability levels demanded by investors.

As part of the restructuring, most of the staff in the division at the bank’s Dubai office were leaving. The sources said UBS was negotiating the exit of veteran Gulf Arab banker Albert Momdjian, who the bank hired in 2011 from Credit Agricole to run its ultra-high-net worth and corporate advisory group for Middle East and Africa.

The bank was only likely to keep one employee out of the six staff at the unprofitable Dubai unit, two of the sources said. Momdjian, who headed Credit Agricole’s investment banking unit in the region before joining UBS, declined to comment when contacted by Reuters.

Most of the six staff at the unit had joined Momdjian from Credit Agricole’s investment banking arm.