Is UBS about to quietly part company with some of its mid and senior-ranking M&A bankers? Recruiters in London say a series of layoffs are expected at the Swiss bank in the next few weeks, with the cuts falling at executive and managing director level.
Ostensibly, 2015 has been a great year to work in M&A. Earlier this month, information provider Dealogic said global investment banking revenues reached $19.8bn – their highest level since 2007. However, the global figures conceal serious regional variations. Dealogic says M&A revenues in Europe, the Middle East and Africa (EMEA) are down 4% year-to-date.
UBS didn’t comment on the alleged redundancies. Despite being run by Andrea Orcel, a senior M&A banker and making various big name hires in recent years, its M&A business hasn’t done too well this year. Advisory revenues at the Swiss bank rose only 3% in the first nine months of 2015 compared to the same period one year earlier. This compared to increases of 45% at Goldman Sachs and 27% at J.P. Morgan, which are stronger in the booming US market.
If UBS is making layoffs, where are the cuts likely to fall? The chart below shows the relative strength of UBS’s M&A teams by sector in EMEA. Finance, telecoms and construction teams look safe. Oil and gas, technology, and utilities teams, don’t.
If UBS does clear out some of its mid-ranking M&A types before Christmas, it won’t be the only bank doing so. “It’s that time of year,” says another M&A headhunter, speaking on condition of anonymity. “Goldman Sachs and Credit Suisse have also been having a clear-out.” Another headhunter said banks have begun letting go of under-performing M&A bankers “here and there,” and that there’s already a glut of director-level M&A staff: “When you’re a director who’s been let go, it’s very difficult to find a new job. You don’t have the rolodex of an MD [managing director] and you’re not an execution person like a VP [vice president]. We’re seeing some directors who’ve been on the market for six months or more and who can’t find a new role.”
It’s not all doom and gloom though. Alongside its alleged redundancy plans, UBS is said to be planning a London salary hike to compensate for the reduction of fixed allowances, which were condemned by the European Banking Authority earlier this month.
Photo credit: Martin Abegglen
Related articles:
UBS’s investment bank is blowing the rest out of the water, in two chartsOnce upon a time, UBS's investment bank looked a little second rate. Not any more.
Senior banking salaries in London must rise by £200k, soonSenior bankers' wishes have come true. Now that fixed allowances have been rendered similar to salaries, banking salaries might as well rise again.
10 reasons why UBS’s investment bank is the most appealing in EuropeWondering which European bank to go for? For the moment, there is only really one answer.