New UBS boss Ermotti set to cut more jobs

SERGIO Ermotti is expected to swing the axe at UBS’s investment bank after being named chief executive of the group.

Analysts said the appointment of Ermotti, and the decision to replace chairman Kaspar Villiger with former Bundesbank president Axel Weber in May, a year earlier than expected, would reassure investors in the aftermath of the $2bn “rogue” trading scandal. Analysts at JP Morgan have forecast an extra 1,700 job cuts while Swiss media have suggested 1,500.

Ermotti’s rapid rise since joining UBS in April has not been untroubled, however, with sources saying Weber had seen him as merely a fallback option for the top job. Headhunters Egon Zehnder had spent nearly two months looking at alternatives, such as Deutsche Bank risk chief Hugo Baenziger, and former JP Morgan chief Bill Winters.

Yesterday Weber said he welcomed the appointment of Ermotti, the suave former deputy head of UniCredit who has played up his Swiss roots in recent months.

Ermotti, who will explain the shift in UBS’s business plan at an investor day in New York tomorrow, said the bank will focus more on its wealth management businesses.

“A focused, less complex and less capital-intensive investment bank and our asset management business are also key elements for growing our wealth management franchise.”