Smartly dressed and in a good mood, Thomas Rodermann welcomes his guests in the Frankfurt Opera House. He has just met with the bank's various European country heads in Switzerland, part of his responsibilities as the chief of UBS Europe SE, the bank's new pan-European outfit.
The managers had complained that the industry had become overly complicated because of the many rules. But there’s no sense in crying over spilled milk, Mr. Rodermann said, it’s simply the new reality in the banking business.
Since leaving Deutsche Bank two years ago, Mr. Rodermann’s former employer has gone through some major upheaval, and yet its private banking arm remained profitable, something UBS in Germany cannot claim. UBS Germany saw losses of €5.6 million ($5.97 million) in 2015 and €80.6 million the year before that. But the course has been set for UBS Germany to return to profitability, Mr. Rodermann told Handelsblatt in an exclusive interview.
“After I started at UBS, we set up a three-year roadmap: by 2018, the bank will generate profits,” he said. “We will achieve this thanks to targeted growth initiatives, cost reductions and a market that’s rebounding, based on what we can see today.”
I don’t see an exodus from London. Thomas Rodermann, CEO UBS Europe SE
It’s an uphill battle, however, with a lot of groundwork required in investing in personnel, digitalization and efficiency systems, to the tune of a figure in the double-digit millions range, according to Mr. Rodermann.
“We are aiming to be back in the black by the end of the year, but regardless we’re going to reduce the loss massively compared to last year,” he said. “We have done our homework and have a good start in the market.”
The head of the UBS board of directors, Axel Weber, recently said that 1,000 to 1,500 jobs could be relocated to continental Europe in the wake of Brexit, but Mr. Rodermann says it’s too early to tell.
“Whether and how many London jobs get shifted depends on many factors and not least on the future regulatory framework,” Mr. Rodermann said. “There are still too many open questions, so we cannot yet make a decision.”
The fact that the political negotiations over Brexit are supposed to take so long is a big problem for UBS and other banks as it will take at least two years to develop an appropriate infrastructure, he said.
In December 2016, UBS merged several of its European wealth management companies into one subsidiary based in Frankfurt and called it UBS Europe SE. It's the largest asset manager in Europe and highly profitable, according to Mr. Rodermann.
Now that Brexit has forced many financial institutions to rethink their London-based operations, UBS could merge their investment banking business with UBS Europe SE. That's one possible solution, Mr. Rodermann conceded, but it’s not why the new entity was created. “It's no more than one option among many imaginable possibilities,” he said.
Robert Landgraf is Handelsblatt's chief correspondent for the financial markets. Daniel Schäfer is head of Handelsblatt's finance pages and based in Frankfurt. To contact the authors: [email protected], [email protected]