UBS Reorganizes Wealth Management

An internal memo obtained by Reuters said that UBS separated its Swiss banking business from its international franchise. Franco Morra will head the new UBS Switzerland and Juerg Zeltner will lead the international wealth management business.

The two units, which previously formed a single division co-chaired by Morra and Zeltner, will continue to cooperate closely and share some administrative and cost functions, according to the news report. UBS will keep its existing Wealth Management Americas business in place, led by Marten Hoekstra.

Hoekstra took the reins in February, when UBS announced that it would split its wealth management units into an American and international business divisions (see “UBS Splits Wealth Management into Americas, Swiss Divisions”).

In the memo, UBS said that the bank was “confronted with a number of obstacles that are further delaying the turnaround of net new money flows,” Reuters reported. The memo said those obstacles include U.S. litigation and the exit of offshore business in America, as well as a reduction of the number of client advisers.

Also today in a news release, UBS announced its second-quarter results. While Wealth Management Americas recorded a second-quarter loss of CHF 221 million (about $208 million), UBS is optimistic about the future: “We have seen increased activity levels among our wealth management clients, whose investment behavior appears progressively less risk averse. This should improve the fee earning potential of our wealth and asset management businesses.”