The former head of investment banking of UBS will leave the company. His position is said to be filled by a previous employee of Bear Stearns.
Image: Carsten Kengeter when visiting a high school in Hackney, June 2011
Carsten Kengeter leaves UBS. This has been reported by both the «Wall Street Journal» and the «Financial Times» with reference to an internal memo. Kengeter's successor as the head of the «non-core section» of the investment bank of UBS is Sam Molinaro, who has joined the Swiss bank in March 2012 as cheif operating officer (COO) of the investment bank.
Molinaro used to be cheif financial officer (CFO) of Bear Stearns – also when the investment bank collapsed in 2008 – which is why one can attest him significant experiences with handling such institutions. The website «Zero Hedge» has been quick to teasingly remark: «Now Bear Stearns is taking over what's left of UBS...»
According to the internal UBS-memo, Kengeter is going to keep an assisting and advising role with the restructuring in the FICC-sector of UBS until further notice.
A remarkable survivor
An editor at the «Financial Times» commented on Carsten Kengeter's resignation on twitter by saying «A remarkable survivor in investment banking». Indeed, Kengeter was a remarkable survivor: Not only because he - being an investment banker – had a position which was seen as powerful when he commenced his duties, but which has later been considered to be problematic, mainly because the Adoboli scandal has eventually also taken place during his aegis.
When the «Rogue-Trader» case became public in autumn 2011, only few would have thought that Kengeter would also survive Oswald Gruebel CEO at UBS. A survey among readers of finews.ch in November 2011 found that 40 percent expected Kengeter to resign in the near future and that 23 percent thought that he would have to leave in the medium term because of the restructuring of the investment bank, which was decided at that time.
He stayed - and stayed once more
Such a procedure also seemed to make sense: Being the highest administrator in the responsible division, the Adoboli case simply had to damage Kengeter's influence. In the Jérôme Kerviel case – which was overall similar in nature – at Société Générale, after the resignation of the CEO, also the head of investment banking had to leave after a certain period.
But Carsten Kengeter stayed – and he also stayed in the first phase of restructuring. He was merely assisted by a co-head for investment banking: Andrea Orcel, who was, however, someone who knew how to continuously develop his own position.
Even when UBS announced in autumn 2012 to definitely reduce its investment banking to a new standard, Kengeter appeared to be an UBS-employee with a future. The German took up the post as a «manager of businesses, which are not to be continued», which means those parts of investment banking, which need to be concluded within the following years.
So... how good was his salary?
Explanations for this issue quickly spread in the sector, for example with the question of where else he should go (the times, in which FICC-experts of his field were dearly sought after, have passed). There has, however, also been a rumor going around saying that Kengeter – even in the new position – would belong to the best-paid members at UBS.
These are, as stated, rumors and speculations, which did, however, also carry hints at his reputation to be a top earner: The previous employee of Goldman-Sachs has been nominally granted 12.4 million Dollars in 2009. That was a year in which the bank was still in the red. In any case, he now leaves right after the determination of the bonuses.
