TOKYO: While six UBS bankers left the investment banking unit in Japan, seven others have joined the Swiss firm’s equities operations in the world’s best-performing major stock market.
The investment bankers – four managing directors and two executive directors – left the Japan unit this week, according to people familiar with the situation. Seven were hired for Japan equity sales and trading, according to an internal memo obtained by Bloomberg News. Jason Kendy, a Tokyo-based spokesman for UBS, confirmed the contents of the document.
UBS joins Bank of America in boosting Japan equity operations to compete with firms including Nomura Holdings on the back of Prime Minister Shinzo Abe’s economic stimulus efforts.
At the same time, the Zurich-based company is among banks worldwide that have announced at least 100,000 job cuts in the past year amid stricter regulations that make their business less profitable, data compiled by Bloomberg show.
“It’s getting harder for foreign banks to keep an edge in investment banking in Japan as domestic brokerages and lenders are becoming more competitive by offering lower fees,” said Tetsuya Sakabe, managing director at Kanae Associates, an executive-search firm specialising in the financial industry.
The bankers who left covered telecommunications, media and technology, consumer and financial institutions as well as equity capital markets and merger advisory businesses, sources said. Switzerland’s biggest bank released plans last year to eliminate 10,000 jobs worldwide as it shrinks its investment banking arm to focus on wealth management.
HSBC Holdings, Commerzbank and Royal Bank of Scotland Group have signaled job reductions since May, as rules including stricter capital requirements and limits on trading dent profitability.
Barclays, Deutsche Bank and Credit Suisse Group had their credit ratings lowered by Standard & Poor’s this week as regulations and “uncertain market conditions” threaten their business. S&P affirmed UBS’s ratings.
The Swiss firm’s reduced headcount in Japan investment banking comes before Goldman Sachs Group’s Junya Nishiwaki joins the firm on August 23 as a managing director and head of the corporate client solutions division. Nishiwaki, a graduate from the University of Cambridge, will oversee business including advising on mergers and acquisitions.
UBS hired Philip Denham from Citigroup as head of cash trading in Japan, and Seth Moran from Barclays for sales trading business, while Takayuki Inoue also joined from UBS’s asset management unit, according to the memo. The bank also hired three sales staff for Japan equities and one person for execution services.
Japan’s Topix Index has climbed 36 per cent this year on optimism on the prime minister’s policies of fiscal stimulus, monetary easing and structural reforms – known as Abenomics – will beat deflation, weaken the yen and boost economic growth.
“Global investors still focus on Japanese stocks because of Abenomics, so it’s a bold decision for UBS to return to the classic business,” Sakabe said.
(Bloomberg)