UBS Tries Old-School Investment Banking

As head of the investment bank at UBS, Andrea Orcel is trying to revive a lost business model: connecting buyers and sellers of stocks and bonds and advising corporate clients—without borrowing money to boost returns. “What I would very much like to create is a real investment bank,” says Orcel, “the kind that there aren’t anymore.”

Orcel, a 51-year-old Italian who joined the bank in 2012, is making a virtue of necessity. UBS, Switzerland’s largest bank, lost 57 billion Swiss francs ($59.5 billion) during the financial crisis and had to be rescued by the state, which then imposed some of the toughest banking rules in the world. The losses, legal problems, and new regulations left Orcel and Chief Executive Officer Sergio Ermotti little choice but to rein in the investment bank, which is responsible for mergers and acquisitions, underwriting of stock and bond offerings, and trading bonds, stocks, and currencies. In 2013 it contributed about 30 percent of the bank’s revenue; wealth management accounted for most of the rest.