In a shakeup of its management and business structure, UBS said that finance chief Marco Suter will resign and be replaced in September by John Cyran, now the head of the Swiss bank’s financial institutions group.
The decision came as UBS revealed $5.1 billion in writedowns related to its exposure to residential real-estate-related securities in the U.S., as well as to its credit positions in general. The bank painted a gloomy outlook, saying that it does not expect an improvement in the economic or market trends in the second half of the year, and that it would continue to slash staff and costs.
The world’s biggest wealth manager, UBS will also break its business into asset management, private banking, and investment banking, holding each of the three units separately accountable for its performance. Moreover, the divisions will not be able to rely on funding from the other businesses.
“The new structure will create a spirit of transformation, clear accountability and transparency,” said UBS chairman Peter Kurer.
Suter has been the bank’s CFO for a year, after serving on its board of directors. According to UBS, the outgoing finance chief “expressed a desire to step down from his role.” Said Kurer, “His contribution in the past year has been enormous and I am very grateful that he was able to step into the role when we needed him most. We respect and support his desire to step back from the CFO function at this time.”
Cyran previously worked at Arthur Andersen and S.G. Warburg in London. Most recently has been an adviser to the UBS board on the current credit crisis.
“John is a widely respected banker who has specialized for many years in advising financial institutions around the world,” said Marcel Rohner, CEO of UBS. “His insights and expertise will be extremely valuable in our task of restoring the value of UBS.”
UBS writedowns have reached nearly $43.1 billion since the credit crisis began last year. Its global wealth management business saw pre-tax profits fall by 48 percent in second quarter of 2008 compared to previous quarter. Meanwhile, global asset management pre-tax profits increased by 7 percent between the first and second quarters of 2008 and investment banking revenues dropped by 52 percent from the second quarter of 2007 to the second quarter of 2008.