Friday's headlines: UBS to slash IB, boost wealth management
The long-troubled UBS has laid out its plans for a turnaround. The Swiss banking group's new chief Sergio Ermotti says he aims to shrink weak business units and bolster the bank's capital levels, according to the Financial Times. Ermotti was recently confirmed in his new position, following the surprise resignation of former chief executive Oswald Grübel who left in the wake of a $2.3 billion fraud scandal.
UBS will reduce its investment banking staff and slash its risk-weighted assets in its investment bank by half over the next five years while growing its wealth management business by 3 percent to 5 percent annually. The transition mirrors that of competitors including Credit Suisse. UBS is the world's second-biggest wealth manager after Bank of America Merrill Lynch.
The changes include streamlining the investment bank to strip out assets weighted by risk and exiting business like asset securitization and complex structured products. "The investment bank will be less complex, carry fewer risk weighted assets and require substantially less capital to produce sustainable returns for shareholders," said the bank.
JPMorgan Chase and Goldman Sachs disclosed that they have sold protection on more than $5 trillion of debt globally. [Bloomberg]
Legendary investor Bill Miller will step down from Legg Mason. [NY Times]
Deutsche Börse and NYSE Euronext submitted remedy proposals to the EU. [WSJ]
Occupy Wall Street helped kill bank fees and changed the national economic debate, Businessweek says. [Businessweek]
Private equity firm Silver Lake eyes another big fish: Yahoo. [WSJ]
Spanish banks are consolidating. [Bloomberg]
Kagawa in Japan, run by a former Goldman banker, plans to boost its private banking assets by 67 percent. [Businessweek]