UBS’s McCann Taps 3 Former Merrill Colleagues to Rebuild
Michael Stewart, Robert Mulholland and Brian Hull, who already work for Zurich-based UBS, will join a six-member executive committee led by McCann, the CEO wrote in a staff memo scheduled for distribution today. The panel includes Samuel Molinaro, an ex-Bear Stearns Cos. chief financial officer who joined UBS last month, and Shawn Lytle, head of money management in the Americas.
McCann, 54, is the ex-Merrill brokerage chief who helped restore profit at UBS’s U.S. retail brokerage since joining in 2009. He’s turning his attention to the investment bank after UBS, Switzerland’s biggest lender, suffered a $2.3 billion loss from unauthorized trading. The firm has said its trading and mergers-advisory franchise should be simpler, with more consistent profit and less need for capital.
“More of my time is going to be spent on our investment bank,” McCann said in an interview today. “None of this will happen overnight. I’ve been working at the wealth management turnaround for two and a half years, and I expect this to take an equally long period, if not a little longer, but we’re putting a stake in the ground, and we started today.”
UBS CEO Sergio Ermotti, 51, another former Merrill banker, will take part in an “Americas Town Hall” meeting tomorrow with employees, according to the memo.
McCann’s goals include “eliminating unnecessary bureaucracy that is impeding our ability to adapt to changing markets,” he wrote in the memo.
Where past regional CEOs held ceremonial and sales responsibilities without direct oversight of global business lines, McCann said he expects to have more responsibility for the bank’s biggest three U.S. businesses, including brokerage, money management and investment banking.
“Sergio has changed the job of regional CEO and what it means,” McCann said. “He’s made me responsible and accountable for driving our successes as a company in the Americas.”
Stewart, 43, hired from Bank of America Corp. (BAC) in July to be co-head of global equities, became the sole head in October when his co-heads, Francois Gouws and Yassine Bouhara, resigned in the wake of the unauthorized trading loss.
Mulholland, 59, head of wealth management and investment solutions, and Hull, 52, who leads strategic clients and partnerships, were hired by McCann in November 2009.
Molinaro, 54, was hired as the UBS investment bank’s chief operating officer. Lytle, 42, has been with UBS since 2002, when he joined from JPMorgan Chase & Co., according to data compiled by Bloomberg.
McCann was promoted in December to oversee all of the bank’s operations in the region after leading the U.S. retail brokerage to a pretax profit in 2011. Pretax income in the Wealth Management Americas unit was 504 million Swiss francs ($558 million), compared with a 2010 loss of 130 million Swiss francs. Clients added a net 12.1 billion Swiss francs of new money to their accounts last year, following outflows of 6.1 billion Swiss francs in 2010.
The U.S. investment bank, which includes trading and investment banking as well as mergers advice and underwriting, didn’t fare as well. Among advisers on U.S. mergers and acquisitions, UBS tumbled last year to 10th with a 10 percent market share, from eighth and a 13 percent share in 2010. In 2008, the bank ranked sixth with an 18 percent market share.
He started his 26-year career at Merrill in 1982 as an associate in equity sales and trading, rising by the late 1990s to run the equities division. In the early 2000s, as Merrill faced allegations over misleading stock reports, he was put in charge of the firm’s research division. In 2003, he moved to the brokerage side and in 2005 was named president of global wealth management by then-CEO Stan O’Neal.
Merrill Lynch almost collapsed in late 2008 because of bad bets on subprime mortgages made under O’Neal, and the firm had to sell itself to Bank of America, based in Charlotte, North Carolina. McCann announced his resignation on Jan. 5, 2009, four days after the merger was completed. UBS received its own bailout in 2008 from the Swiss government.
At the time of his departure, Merrill Lynch’s retail brokerage had about 16,090 financial advisers -- more than double the 6,697 U.S. advisers at UBS as of Dec. 31.