IFR Editor-at-large Keith Mullin
Meanwhile, Bank of America Merrill Lynch EMEA and Canada president Jonathan Moulds is retiring to make way for Christian Meissner, whom Tom Montag has singled out to super-charge the performance of the investment bank.
An ex-Goldman and Lehman man, Meissner joined BofA Merrill just two years ago from Nomura, and was only made sole head of global corporate and investment banking a couple of months back. He’s now taken on an additional role as interim president of Europe and ex-Asia emerging markets. That’ll have to change as the transition takes shape; the GCIB job alone is a big enough challenge for one person. I have a great idea for that. See below.
The fact that Moulds and Orcel had co-existed for so long within BofA Merrill was a pretty remarkable feat. Both are accomplished achievers and larger-than-life characters, and the BofA takeover of Merrill had put them on something of a collision course.
Moulds was the senior partner at the time of the takeover, but management did everything it could to keep Orcel from bailing, giving him ever more money and impressive-sounding titles – a bit like a generalissimo in a banana republic demanding more shiny medals.
In the end, Orcel and Moulds just kind of agreed to stay out of each other’s way. I don’t get the impression they had a bad relationship; I think Moulds opted to focus on his management responsibilities, which gave him time to devote to his philanthropic pursuits, while the high-maintenance Orcel was out schmoozing clients and fronting deals. It’s fitting that they’re both leaving at the same time.
Orcel was offered Moulds’ job. But if you’re already executive chairman with direct responsibilities for corporate strategy, engagement with major corporations, investors and governments PLUS you’re president of emerging markets ex Asia: managing corporate and investment banking, sales and trading, and wealth and investment management, I can understand why adding operational line-management responsibilities for EMEA and Canada might not float your boat.
The fact that Moulds and Orcel had co-existed for so long within BofA Merrill was a pretty remarkable feat
Away from the bank, Moulds will focus fully on his philanthropic interests. A keen and high-profile patron of the arts, Moulds is in the news these days not for lending money, but for lending his collection of Stradivarius violins to young musical prodigies (most recently to Nicola Benedetti).
I DON’T REALLY understand Orcel’s move to UBS, not least because he and Kengeter will be jointly responsible for implementing the strategy the bank outlined at its investor day last November. That strategy, in simple terms, is to blow up large chunks of the investment bank and basically turn it into a feeder for asset management and the private bank.
And just compare and contrast the league-table performances of Merrill Lynch and UBS in 2011 and 2012 year-to-date across M&A, ECM and DCM. Merrill wins hands down. Even though Brian Moynihan’s got his work cut out at the Bank of America group level to deal with a myriad of issues, including the share price, the fortunes of Merrill Lynch and UBS in investment banking will continue to move inversely as the reduction of UBS’s investment bank proceeds and as US economic prospects improve, benefiting US investment banks.
Unless Orcel sees the UBS move as his own sunset trade, I wonder what he thinks he can achieve when the die has already been cast. One thing’s for sure, though: Orcel’s arrival will be Kengeter’s exit trade. I would bet this is written into Orcel’s 24-carat golden hello from Ermotti. I can’t imagine Orcel will stomach being co-CEO for any length of time.
So what of Kengeter? I wrote a blog last September that was deeply unpopular at UBS. I named a core cast of seven senior executives (plus some board members) I said should quit, be fired or consider their positions in the light of the Adoboli trading scandal. My list included Ermotti (only because he was EMEA chairman and CEO at the time, but only in situ since April 2011).
I said Ossie Gruebel’s position was untenable. Gruebel walked, albeit with little grace. I named Maureen Miskovic, group chief risk officer. Miskovic was removed in December 2011 (replaced by Philip Lofts, the man she had replaced). I named Francois Gouws and Yassine Bouhara, joint global heads of equities. They quit in October.
Beyond Ermotti, who was always favourite to take over as group CEO, the only two on my list who remain in situ are Mark Sanborn, chief risk officer at the investment bank, and Kengeter. I don’t understand how a CRO for a business that uncovers a major fraud can survive. I look forward to seeing the bank’s review to get more insight on this.
FOR KENGETER, IF if your boss takes responsibility for the scandal and walks, and the two people who report to you and who are most directly in the line of fire take responsibility and walk, shouldn’t that tell you something? Perhaps if Kengeter had drawn an IB org chart on paper and erased the names of those who’d gone, he might have spotted something.
I’ve got a great solution. How about a reverse swap that sees Kengeter joining his ex-Goldman colleague Meissner as EMEA president at BofA Merrill? I hear there’s a vacancy.
