Morning Coffee: The 43 year old with the most stressful job at UBS, and when M&A bankers fall in love
Iqbal Khan has had an eventful time since swapping Credit Suisse for cross-town rival UBS - his old firm hired spies to stop him poaching former colleagues in a scandal that dominated the tabloid press and resulted in lurid tales of his spectacular falling out with former boss Tidjane Thiam. And things aren’t about to quieten down for the 43-year old any time soon.
He’s just weeks into his new role as co-head of UBS’s international wealth management division and his new boss Sergio Ermotti wants him to hit the ground running. Speaking at the bank’s third quarter earnings call, Ermotti said he has told Khan to assess what’s wrong with the business, report back in December – then fix it. Khan achieved superstar status by doing a similar job at Credit Suisse, where he boosted fees by increasing loans to rich individuals. Whether he can pull off a similar feat at UBS remains to be seen. His remit spans Europe and Asia but the U.S. is the domain of fellow co-head Tom Naratil and the man with whom his vying to succeed Ermotti when he eventually steps down.
It’s not all bad. UBS Group’s asset management reached a record $2.5 trillion in the third quarter of 2019 and the wealth unit did better than expected. However, group profits slumped 16% as the its slimmed down investment bank underperformed. The bank’s advisory business suffered from a lack of scale in the US, the world’s deepest capital market. UBS is restructuring its investment bank and said it will thin out its senior ranks as it looks to control costs and free up capital to expand in the U.S.. But the investment bank is no longer its core business, consuming a third of overall risk-weighted assets.
That puts even more pressure on Khan to boost UBS’s flagship business. The world’s largest wealth manager is generating less profit on assets under management that is arch-rival. Khan is fiercely ambitious – he left Credit Suisse because he wanted Thiam’s job. The pressure is on and at a time of negative interest rates and sluggish growth in Europe, the most ambitious man in banking must prove he also has the patience to match.
Separately, and talking of relationships going bad, two star-crossed lovers who worked at rival boutiques have been charged in the U.S. for allegedly pocketing $1million from an insider trading scheme. Benjamin Taylor, who worked for Moelis & Co. and and Darina Windsor, who worked for Centerview referred to each other as 'Pops' and 'Popsy' and sold their information to middlemen. They used their winnings to buy luxury watches and trips abroad.
Centerview and Moelis have been at the forefront of the rise of independent M&A firms which pride themselves on the integrity of their advice. Now, with the M&A cycle turning, could it spell the end of the affair?
Gloom and doom: The next downturn could claim more than half of the world’s banks because they are not economically viable, according to McKinsey. (Bloomberg)
Can Wells Fargo’s new CEO handle the marathon commute? (Financial Times)
Brevan Howard could be putting its troubles behind it. (Financial News)
Two former Deutsche Bank employees accused of fraudulent precious-metals trading have failed to get the case thrown out. (Bloomberg.)
Jamie Dimon’s efforts on WeWork wont get the rewards he was looking for. (CNBC)
Central banks have a diversity problem. (Financial News)
Running a European bank is a thankless task. (Financial Times)
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