By Katie Reid and Lisa Jucca ZURICH (Reuters) - Robert McCann, the new head of the battered U.S. wealth management unit of Swiss bank UBS AG <UBSN.VX> <UBS.N>, said he aims to stem client withdrawals and has no plans to sell the business. McCann, a Merrill Lynch veteran who led the brokerage's wealth management business until early this year, took up his new $850,000-a-year post on Tuesday and vowed to rebuild trust in UBS' money-losing American unit. The 51-year-old had been courted by UBS Chief Executive Oswald Gruebel since July and sued his former employer to enable him to join a rival. The U.S. wealth management division of UBS was hit by 5.8 billion Swiss francs ($5.8 billion) of net client outflows in the second quarter as the bank fought a bruising tax fraud case with U.S. authorities. Analysts say it is still suffering. That has prompted some to speculate that UBS might sell the business -- a proposition that McCann rejected. "I had to go to court against two of my former employers to be able ... to work with UBS," McCann said on a conference call with reporters. "I would have not done that if the whole goal was to sell the company." Media reports had said other contenders for McCann's job included Wachovia Securities Chief Executive Daniel Ludeman. Sallie Krawcheck, former Citigroup Inc <C.N> chief financial officer, had also been seen as a candidate before her recent appointment as global wealth and investment management president at Bank of America Corp <BAC.N>. McCann, who left Merrill Lynch only a few weeks after it was acquired by Bank of America, said he would unveil his new strategy for the UBS unit early next year but already expects to make selective cost cuts. He said he wants a more nimble and cost-efficient structure. He said his bonus would be based on performance and that his base salary would be $850,000, in line with new compensation rules announced by UBS. During a court hearing in his case against Bank of America, which bought Merrill Lynch to become the world's largest wealth manager ahead of UBS, McCann said he had to give up a bonus that could have topped $5 million. Speaking from a hotel room in Manhattan just before taking up his new job, McCann said he was excited at the new challenge and that he got on well with Gruebel from the start. "We immediately established a chemistry between the two of us," said McCann, who was at Merrill Lynch for 26 years. McCann will report to Gruebel and be a member of the UBS board. His predecessor, Marten Hoekstra, is leaving the bank. UBS did not provide details about Hoekstra's future, and analysts declined to speculate on where he might land after 26 years at PaineWebber and UBS Wealth Management Americas. Analysts welcomed McCann's appointment. "We believe McCann has the managerial capacity needed to revise and restructure the U.S. wealth management Americas business to become more profitable," Vontobel analyst Teresa Nielsen said. She also said it was still possible UBS might spin off the unit. Shares of UBS closed down 0.56 percent at 17.88 Swiss francs. TOUGH CHALLENGE Gruebel, pulled out of retirement in February to restore UBS to its former glory, has now made a clean sweep of a team of top wealth managers chosen by his predecessors. Continued... |