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David Kruck's rapid rise at UBS, from Chief of Staff to the Group CEO to Global Head of Structuring and Client Platform, raises questions about his qualifications, especially given his lack of direct client experience. His ascent is closely tied to Ulrich Körner, who, despite his own controversial history, has played a pivotal role in Kruck's career trajectory. As UBS navigates challenges, the dynamics between Körner, Kruck, and CEO Sergio Ermotti highlight the complexities of leadership within the bank.
UBS is planning a 108-meter tower in Zurich-Altstetten, pending voter approval in three weeks. Following the CS takeover, UBS has vacated the Seebach Tower and is uncertain about the future of the Uetlihof, preferring to transfer it to the city. The financial group aims to consolidate its presence in Zurich, where it already has multiple branches.
Incompetence and scandals led to the downfall of Credit Suisse (CS), while UBS's focus on wealth management has made it more resilient. However, UBS is now deemed "too big to save," raising concerns about its liabilities and the effectiveness of cross-border bank mergers without clear resolution rules. Banking expert Martin Hellwig warns that higher capital requirements are essential for stability, yet the influence of banks has hindered significant reforms since the 2008 crisis.
UBS shares surged to a new annual high, trading at CHF 29.06, following strong third-quarter earnings and progress in the integration of Credit Suisse. Analysts praised the bank's performance, noting it exceeded profit forecasts for the third consecutive quarter and is ahead of schedule on cost-cutting plans, now targeting USD 7.5 billion in reductions by the end of 2024. Most analysts continue to recommend UBS shares as a buy, highlighting a positive outlook and commitment to dividends and share buybacks.
Thomas Gottstein's refusal to support a merger between UBS and Credit Suisse (CS) in 2020 marked the beginning of CS's decline, as he believed he could independently steer the bank back to stability. Despite significant losses from the Greensill and Archegos scandals, he remained CEO until 2022, while Urs Rohner, the Chairman, failed to hold him accountable. Ultimately, UBS acquired CS for a mere $3 billion amid the fallout from the Silicon Valley banking crisis, highlighting the missteps of both Gottstein and Rohner in navigating the bank's challenges.
UBS has faced backlash from its employees after former Credit Suisse (CS) executives retained their higher salaries post-merger, leading to discontent among UBS staff. In response, UBS management has increased salaries for certain UBS employees by up to CHF 20,000, despite claims of a strict pay-for-performance policy. This move comes as UBS aims to save $13 billion by 2026, with a significant portion attributed to rising salary and bonus costs.
FINMA has not approved UBS's emergency plan, citing the need for adjustments following the integration of Credit Suisse. While UBS has sufficient funds to cover losses, the authority demands more flexibility in crisis planning, allowing for the potential sale or bankruptcy of individual business areas. Experts emphasize the necessity for legal certainty and international cooperation among central banks to effectively manage future restructuring and financial stability.
UBS is currently ranked tenth in the global mergers and acquisitions league table and aims to become the leading European investment bank. Despite ongoing integration efforts, the major Swiss bank is focused on increasing its market share in the USA as the M&A business experiences growth.
CS Baumann
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The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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