Oswald Grubel: The Most Optimistic Man In Banking

We’ve already noticed how Oswald Grubel, chief exec of UBS, has a dogged positivity usually associated with Portsmouth managers, evangelical Christians and the cast of High School Musical, but he’s really outdone himself this time. He may be head of a bank that America hates with the entire force of its legislative being, that has a habit of hiring crooks, and that has been burning through money with oxyacetalene equipment. He may look like the product of a failed genetic experiment involving Ricky Gervais and an old Chinese man. But he’s not letting that get him down.

Grubel has announced that UBS is aiming for nearly £9bn in profits over the next three to five years. That’s considering that they just lost another £331m last quarter, to add to the £11.6bn they lost in 2008. An analyst at JP Morgan told the FT: “We wanted figures, we wanted a timeframe for hitting them and we wanted divisional breakdowns. The challenge now is to meet those targets”. Quite.

To be fair, the losses have been slowing down – perhaps the cutting of thousands of staff had something to do with it. Trouble is, investors have also been leaving the bank, cutting its revenue to £1.6bn – Grubel is aiming for nearly £12bn in revenue to generate those profits. There’s a sense that the worst is over, but they’re still tarnished by the ongoing legal disputes, and at a time when they need new revenue fast.

Ah yes, the legal disputes – the US wanted UBS to hand over names of its clients who were evading tax, UBS refused, and the whole thing led to some diplomatic handbags being brandished. The US eventually got a bunch of the names, 250 of which have now been revealed to be serious fraudsters. They arrested some of them straight away earlier in the year, and said that if tax evaders wanted to avoid the same fate they could come clean about their accounts. It was a very clever move by the US – it’s just been revealed that 14,700 customers came forward, many of whom could have probably got away with not announcing themselves. It’ll be interesting to see how many people on the list gambled on not being, and didn’t come forward – there could be some rather juicy fraud cases on the horizon.

Meanwhile let’s raise a glass to Oswald Grubel. Whether he truly believes he can meet his targets, the sheer never-say-die ballsiness of his stance is more the stuff of Hollywood sports films rather than Swiss banking. Whether anyone will be convinced, we’ll have to wait and see.

Posted by Ben Beaumont-Thomas in Hot Money | November 18, 2009 12:17PM |