Equities

UBS Eyes US Growth, Karofsky for CEO in Strategy Shift

UBS plans US leadership revamp, eyeing Karofsky for CEO to boost its wealth management and investment banking sectors.

By Athena Xu

5/16, 10:52 EDT
Morgan Stanley
UBS Group AG Registered
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Key Takeaway

  • UBS plans to appoint Rob Karofsky as US CEO, overseeing investment and wealth management, aiming to boost its US market presence.
  • The move allows global wealth head Iqbal Khan to focus on Asia and the Middle East, highlighting UBS's strategy for global wealth expansion.
  • Despite being a top global wealth manager, UBS seeks to close the gap with competitors like Morgan Stanley in the lucrative US market.

UBS Leadership Restructuring

UBS Group AG is reportedly in discussions to appoint Rob Karofsky, the current head of its investment bank, as the leader of its entire US operations. This strategic move aims to consolidate the Swiss bank's efforts to expand its footprint in the lucrative US wealth market. Karofsky, 57, would oversee both the US investment bank and the key wealth management business, marking a significant shift in the bank's US leadership structure. This decision reflects UBS's intention to streamline its operations and focus on key growth areas, particularly in wealth management, a sector where the US holds substantial potential.

Strategic Focus on Wealth Management

The potential elevation of Karofsky allows Iqbal Khan, the global head of wealth management, to concentrate on burgeoning markets in Asia and the Middle East. This strategic realignment is indicative of UBS's broader ambition to enhance its global wealth management presence, with a particular emphasis on the US as a pivotal market. The bank's CEO, Sergio Ermotti, has underscored the importance of the US wealth sector in UBS's growth strategy, especially following the acquisition of Credit Suisse. This takeover is seen as a critical step in bolstering UBS's investment banking capabilities in the US, aiming to attract entrepreneurs and ultra-high-net-worth individuals as wealth clients.

UBS's US Market Challenges and Opportunities

Despite being the world's largest wealth manager outside the US, UBS has faced challenges in expanding its market share within the country. The bank operates a network of over 6,000 financial advisers in the US, a number that trails behind its main competitor, Morgan Stanley. Ermotti has acknowledged the discrepancy between the bank's cost base and its capabilities in the US, highlighting the need for UBS to enhance its leverage of the global franchise in the American market. The leadership changes and strategic focus are part of UBS's long-term plan to bridge this gap and strengthen its position in the US wealth management sector.

Management Quotes

  • Sergio Ermotti, CEO of UBS:

    "We have the cost base of a much larger organization in the US but we don’t have the capabilities yet that allow us to fully leverage our global franchise."