UBS (UBS) May Shutter Über-Profitable Restructuring Business
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According to the NY Post Thursday, UBS (NYSE: UBS) could sell it's stand-alone, debt-restructuring business. News comes as the bank affirmed it's U.S. brokerage, Wealth Management Americas, will be retained despite lower profitability from the arm.
Recently, Steven Smith, head of UBS's restructuring unit, resigned from the firm, with talks he may take up position at Aurora Capital Group.
Another executive, Doug Lane, is said to mull exiting the firm as soon as next week.
Though a UBS spokesperson said executive departures don't mean the unit is being shut down, Smith, et al, have said the unit will be "de-emphasized."
But why give away free money? According to some sources, the restructuring arm adds as much as $80 million in profits to the bank with little in the way of overhead.
Cost-cutting measures were already being implemented several months ago, but following the recent trading scandal, which cost UBS as much as $2.3 billion, emphasis has been on reducing overhead by more. Some speculate executives are looking to save $100 million or more per year following further corporate streamlining.
UBS shares are 4.2 percent lower Thursday.
Recently, Steven Smith, head of UBS's restructuring unit, resigned from the firm, with talks he may take up position at Aurora Capital Group.
Another executive, Doug Lane, is said to mull exiting the firm as soon as next week.
Though a UBS spokesperson said executive departures don't mean the unit is being shut down, Smith, et al, have said the unit will be "de-emphasized."
But why give away free money? According to some sources, the restructuring arm adds as much as $80 million in profits to the bank with little in the way of overhead.
Cost-cutting measures were already being implemented several months ago, but following the recent trading scandal, which cost UBS as much as $2.3 billion, emphasis has been on reducing overhead by more. Some speculate executives are looking to save $100 million or more per year following further corporate streamlining.
UBS shares are 4.2 percent lower Thursday.
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