Has the final nail been driven into the coffin of the investment arm of Swiss Bank UBS following its 1.4 billion euro rogue trading loss? How will private clients now react having digested the news and what is the future for its senior executives?
There are no answers from UBS, but according to elements in the press and industry insiders, mid-November is when the axe will fall with a major restructuring plan to be announced.
“UBS is a big private banking firm business, that’s their jewel in the crown, it’s solid, good quality. And obviously, if you are a rich person who wants to preserve your capital, preserve your money, the last thing you want to do is give it to a bank that has a rogue trader lose two billion dollars, so that is the concern for UBS, the damage to its reputation, the reputational risk of this event,” explained Louise Cooper of BGC Partners.
UBS had recently announced a cost cutting plan. Some 3,500 jobs were axed in a bid to save an annual 1.6 billion euros. The rogue trading loss effectively wiped that out.
Added to the unsettling times, credit ratings agencies have placed the bank on review for a possible downgrade.