UBS chief names top team for recovery plan
New UBS chief financial officer John Cryan is among a four-strong crack team assembled by group chief executive Marcel Rohner to oversee the bank’s path back to health after a year of billion dollar writedowns that have rocked the Swiss group.
Cryan, who has spent more than 20 years with UBS having worked for Warburg Dillon Read before it became part of the Swiss group, was yesterday named group CFO in a raft of executive and board changes, and as such he will play a vital role in helping Rohner put into action UBS’ remediation plan aimed at addressing the business and structural issues that contributed to the bank’s problems.
Cryan, who runs UBS’ financial institutions group and will assume the CFO brief on September 1, will be one of a four-strong steering committee that will support Rohner in the remediation plan, according to a summary of ther plan published by the bank alongside its second-quarter results yesterday, when it revealed further writedowns and losses and both investment banking and group level.
The other members of the steering committee are: group chief risk officer Joe Scoby, who moved from the asset management division in October last year; Jerker Johansson, the former Morgan Stanley banker who was installed as chief executive of the investment bank in March; and Philip Lofts, who became chief operating officer for risk after previously acting as UBS’ group chief credit officer in mid-May.
UBS’ board of directors and group executive board will each receive monthly updates on the progress of the remediation plan, which will address issues across strategy, governance, risk management, risk control and finance, funding and balance sheet management and compensation, the bank said yesterday.
UBS outlined several plans within those areas yesterday, but admitted changes to its compensation model, a point that has attracted criticism across the industry for misaligning short-term performance and long-term targets, are constrained while other banks continue to “apply traditional models”.
UBS expects to devise a new compensation plan by the end of the year.
Meanwhile, Olivant, the investment group which has been agitating for change at UBS, yesterday supported the Swiss bank's new strategic direction, which it said will help investors to better value the wealth, asset management and business banking businesses.
Under the new plan announced yesterday, UBS will be separated into three autonomous units. Each unit will be given increased operational authority and accountability and will also need to independently fund its activities, in contrast to the past where the investment bank was in part subsidised by the group's other business lines. The three business units are wealth management and business banking, asset management and investment banking.
However, Olivant also warned that the plan now rests on its effective execution and cautioned that full closure on the US regulatory and reputational issues had not yet been achieved.
Luqman Arnold, chairman of Olivant, and a former chief executive of UBS, said: “We continue to favour UBS due to the strength of its client franchises and the stability of its operating cashflow generation. The substance and speed of the company’s response, as set out [yesterday], provides us with encouragement that the board is fully committed to shareholder value creation.”
Olivant holds a 2.78% stake in the company.
--write to vahuja@efinancialnews.com; rschultes@efinancialnews.com
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