* UBS could revive SG Warburg for spun-off unit, says
* UBS cut 2,000 staff since announcing 10,000 cuts
* Investor Knight Vinke has called for disposal of
* Shares unchanged
ZURICH, Jan 9 UBS is looking again at spinning
off its investment bank - and may even rescuscitate its old SG
Warburg brand - to fend off demands that it put aside yet more
capital to protect private banking clients from its investment
activities, according to Mediobanca analysts.
The Swiss bank has cut 2,000 jobs of a promised 10,000 under
a three-year plan to quit fixed income trading seen by
regulators as high risk - but that has not been enough for Swiss
politicians now drawing up tougher rules to curb borrowing by it
and Credit Suisse
UBS has been scrutinized since its 2008 bailout by
the Swiss government, and is also under pressure from activist
shareholder Knight Vinke to dispose of its investment bank
altogether. UBS has always refused to do this on the grounds
that it is a key strategy pillar
and on Thursday declined to comment on the Mediobanca report.
The Mediobanca analysts said UBS was more likely now to
dispose of its investment bank not only because of the
relentless pressure on it but also because its earnings
trajectory was back on track after the financial crisis.
An outright sale of the investment bank, run by renowned
European dealmaker Andrea Orcel, is improbable given the high
price top talent would command, according to Mediobanca.
Instead, UBS could spin it off to existing shareholders and
call it SG Warburg after the British merchant bank it bought in
1995. Following several subsequent deals and mergers the Warburg
name was retired in 2003.
UBS would then be able to tap strategic investors and
sovereign wealth funds to help infuse an independently-run
Warburg with capital - and enable the Swiss government to
demonstrate to the electorate it had substantially derisked the
bank sector, the Mediobanca analysts said.
UBS and Credit Suisse form the backbone of a financial
industry that generates 6 percent of the Alpine nation's gross
"As a result, (Swiss financial regulator) FINMA would almost
certainly be able to take a more benign view of a predominantly
asset gathering institution and the New UBS would hope of an
improvement in its credit rating, which should provide a
positive impact on funding costs," said Mediobanca analyst Chris
Investors, who have applauded the renewed focus on its
flagship private bank as a result of the withdrawal from large
parts of fixed income withdrawal, were little moved by the
At 1125 GMT, the stock was unchanged, amid a 0.5 percent
rise in the broader European bank index.
Credit Suisse has said it will stick with investment
banking, but plans to shrink its interest rate trading arm,
further scaling back an area squeezed by strict new regulation
and a drop in activity.
(Reporting By Katharina Bart; Editing by Sophie Walker)