The measures, also known as “red lines,” are meant to prevent UBS from going in the same direction as Credit Suisse, according to asset manager Cardano analyst Corné van Zeijl. “Credit Suisse has brought in new bad clients for years in a row and has had to deal with corruption and money laundering scandals,” she explains. “So now UBS says a lot of things won’t happen again to avoid them falling into the same trap.”
“Credit Suisse brought in new bad clients for years in a row and faced corruption and money laundering scandals”
UBS chairman Colm Kelleher previously said he feared “cultural contamination,” by which, according to Van Zeijl, he meant fears the takeover would also lead to “bad apples” caught among staff. “If you have a culture that focuses on making as much money as possible, and if you don’t factor in the risks involved, it could turn out to be much more expensive later on.”
Ten percent
Ten percent of Credit Suisse employees are gone, and Van Zeijl doesn’t think it will stop there. Especially since UBS wants to reduce risks. “They are working on it, but they also want to increase profits,” explains Van Zeijl. “This means that the pool of non-productive staff must remain as small as possible.”
Van Zeijl therefore expects there to be significant cuts in this, stressing that it’s important for UBS not to put everything and everyone on the street. “If you want to do business – and certainly with big wealthy clients – you need a banker who stands up.”
Risk
According to Van Zeijl, the list of countries from which UBS no longer admits new clients is “incredibly long”. He argues that business shouldn’t be done with “any country that ends in -stan” or “smells a little bit wrong,” “lest they go in the same direction as Credit Suisse.”