* 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 slightly lower
(Adds comment from UBS and Mediobanca's Wheeler)
ZURICH, Jan 9 UBS may be thinking
again about spinning off its investment bank - and could 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
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 who are considering tougher rules to curb borrowing
by it and Credit Suisse
"We think these events have resulted in UBS dusting off
plans, we are sure they have, for disposing of the investment
bank," wrote Mediobanca analyst Chris Wheeler in a note, adding
such a move was also made more likely by "the earnings
trajectory of the business."
Wheeler said he based his assertion on the strategic logic
for such a move.
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
"We've been very clear on our strategy and it includes the
investment bank," a spokesman for UBS said on Thursday.
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's investment bank was in sixth place last year -
unchanged from 2012 - for European equity capital markets deals,
which includes working on new stock market listings, bonds
convertible into shares, and sales of new or existing stock by
already listed companies.
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 Wheeler.
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 1618 GMT, the stock was 0.3 percent lower, amid a 0.4
percent fal 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)