Tuesday 4 October 2011

UBS culture problems

Interesting analysis piece in today's Financial Times by Megan Murphy and Haig Simonian. They argue that leading investment banks are struggling to redefine their identities amid tough market conditions. While the article singles out UBS, also in the frame are Bank of America Merrill Lynch, Morgan Stanley, and Royal Bank of Scotland.

As interim UBS CEO Sergio Ermotti wrote to all his staff last week, "We must now summon our collective strength to demonstrate what UBS stands for." About time too, many UBS employee would say. As Murphy and Simonian note:
UBS insiders say the constant influx of new staff, plus a virtual merry-go-round at the top, had already made it hard to knit together a cohesive culture. The investment bank has reshuffled its executive committee more than 10 times in three years, bringing in senior people from Deutsche Bank and other rivals who frequently brought clashing management styles. Insiders cite a structure where the equities and fixed income divisions are led by four global co-heads – only one of whom worked at the bank before July 2009 – as particularly problematic.
Across the investment banking sector, efforts to find sustainable profit lines now like the US Army's hunt for Saddam Hussein's missing WMD - great prizes promised for those units that find the 'treasure' but no evidence that it actually exists.

So what does UBS (and indeed the other banks) stand for now? It's time for industry leaders to stop blaming markets, regulators, rogue traders for their woes and start telling us where they stand amidst the maelstrom.