Oswald Grubel, the new chief executive of beleaguered UBS AG will likely will take a “fresh, hard look” at the Swiss banking giant’s retail-brokerage business.
Oswald Grubel, the former head of Credit Suisse Group, who was named as the new chief executive of beleaguered UBS AG yesterday, likely will take a “fresh, hard look” at the Swiss banking giant’s retail-brokerage business, according to an industry analyst.
“It’s still too early to tell what he will do, but there are indications that he wouldn’t be afraid to sell the unit if he thought that’s what needed to be done,” said Alois Pirker, a senior analyst for Boston-based Aite Group LLC.
Mr. Grubel, 65, spent much of his career at Credit Suisse Group and was chief executive there from 2003 to 2007. He had been retired until now.
Despite its vast resources, Credit Suisse didn’t acquire a large retail-brokerage firm in the U.S. comparable to UBS’ purchase of PaineWebber Group Inc. of New York in 2000, Mr. Pirker noted.
What’s more, he pointed out, Credit Suisse of Zurich sold off its insurance division, Winterthur Swiss Insurance (also of Zurich), in 2006, after it had been criticized as a poor fit for Credit Suisse, much the way the former PaineWebber unit is now viewed by some as a questionable fit for Zurich-based UBS.
“PaineWebber isn’t Grubel’s legacy,” Mr. Pirker said.
“He can take a fresher approach and analyze it more closely. The question is, does UBS want a retail-brokerage business?” Mr. Pirker said.
In a memo sent to UBS staff members yesterday, Mr. Grubel said that changes would be coming to the troubled bank, which last week settled a U.S. criminal tax evasion inquiry by agreeing to pay $780 million to American authorities and to turn over the identities of private-account holders to the United States.
“Given the current business climate in many of our markets, further substantial cost reductions will be inevitable,” he wrote in the memo.
