Business and Finance

Merrill Lynch veteran Robert McCann, the new head of UBS’s loss-making U.S. wealth management unit, said he had no plans to sell the business that was battered by a high-profile tax row.

McCann, who led the wealth management business at Merrill Lynch until early this year, took up his $850,000-a-year post at the Swiss bank on Tuesday and vowed to rebuild trust at its American unit.

He 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 division of UBS was hit by 5.8 billion Swiss francs ($5.8 billion) of client withdrawals in the second quarter of this year, as the bank fought a bruising tax case with U.S. authorities, and analysts say it is still suffering.

That has prompted some to speculate that UBS might eventually want to 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. “I would have not done that if the whole goal was to sell the company.”

McCann, said he would unveil his new strategy for the unit in the first quarter of 2010 but already expected to make selective cost cuts. His aim was to have a more nimble and more cost-efficient structure, he said.

The 51-year-old executive said he would take a performance-related bonus that his base salary would be

$850,000.

During a court hearing in his case against Bank of America, which bought Merrill Lynch, McCann said he had to give up a bonus that could have topped $5 million.

Speaking from a hotel room in mid-town Manhattan just before he took up the new job, McCann told reporters he was “excited” at the prospect of joining the Swiss wealth management giant and that he got on very well with Gruebel from the start.

“We immediately established a chemistry between the two of us,” he told reporters.

The new U.S. wealth chief will report to Gruebel and be a member of UBS’ executive board. McCann said his predecessor, Marten Hoekstra, is leaving UBS.

Analysts welcomed McCann’s appointment, which had been widely expected.

“We believe McCann has the managerial capacity needed to revise and restructure the U.S. wealth management Americas business to become more profitable,” said Vontobel analyst Teresa Nielsen, adding it would still be possible to spin off the unit. 

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