Can you imagine what a nightmare it is to be Oswald Gruebel right now?
After having served as CEO of Credit Suisse , he retired in 2007. He was dragged out of retirement two years ago to run UBS.
Oliver P. Quillia for cnbc.com
UBS
For a short time, things seemed to go very well. The Swiss bank settled a long-running dispute with the US government over whether the bank had helped customers dodge taxes. He appointed a popular executive to run the financial advisory business that company had purchased at the height of the dot com stock bubble. The bank stopped losing brokers and client assets.
Lately, however, nothing is going Ossie's way. There have been rumors that the bank may sell its brokerage business. Bank executives deny this but many insiders take this with a grain of salt. They suspect that for the right price, Gruebel would sell. This is making internal tensions at the bank even more strained than usual.
(A bit of background. In 2000, UBS acquired the US brokerage Paine Webber. The cultures of the two companies have never fit together smoothly. When the dot com crash hurt the profitability of brokers, many at the Swiss bank came to look at the acquisition as a mistake.
The brokers resented what they perceived as a disdainful attitude from the bankers. This clash has grown worse in recent months. "Our investment bankers treat our FAs like they're retarded children," one person at the bank told me.)
Meanwhile, the investment bank appears to be falling apart. There have been scores of defections by top investment bankers. Earlier this week, one of the most important bankers at UBS, leveraged finance head Chris Abbate, walked out. Abbate's business of arranging loans to big corporate clients was an important part of building relationships that can win the bank mandates for IPOs and merger deals. He was highly visible to clients. It will be a challenge to win these deals without him.
Things have gotten so bad that Ossie has to keep sending reassuring notes to his employees, telling them how dedicated the bank is to the investment banking arm.
And then today, the Wall Street Journal says Ossie is going to spin off the investment bank into a separately capitalized unit based outside of Switzerland. Ossie is denying the story but the denials don't seem to be convincing many people.
Do you get the feeling that some days Ossie just wishes he had stayed retired?
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