Andrea Orcel, UBS investment bank: More 'dad time', fewer assets

Andrea Orcel is 20 minutes late. It seems time is a constant battle for the head of UBS's investment bank; he rises at 5am and often works late into the night, but still resorts to running up Zurich's hills instead of around its idyllic lake so he can pack a notional 60 minutes of exercise into 30 minutes of brutal intensity.

In his roomy London office, complete with the Nespresso machine and fresh fruit that fuel his demanding schedule, the 51-year-old compensates for poor timekeeping by turning on the charm that helped make him one of Europe's most successful bankers, so valued that his former employer Merrill Lynch gave him a bonus of more than $30m for 2008, at the apex of the financial crisis.

A polarising figure who has survived involvement in one of the most notoriously bad deals in recent memory - the 2007 buyout of ABN Amro - the Italian has his detractors. But even they say there is no one they would rather have at their side for a client pitch. "He has the X factor," as one former colleague puts it. "Clients love him."

Mr Orcel's task at UBS, which he joined in July 2012, goes well beyond winning new business, however. He is reshaping an investment bank that was once so toxic it threatened the viability of Switzerland's largest bank. UBS's latest results show first-quarter earnings in the investment bank were up 66 per cent year-on-year, but the scars run deep.

Today, the showman front momentarily slips when the voice recorder light turns red. "This is quite formal," he says, fidgeting with a UniCredit pen. Then he is back on form. For two-and-a-half uninterruptible minutes he tells how investment banking was the topic of his university thesis and all he ever dreamt of doing; and then invokes the post civil war era in the US, when investment banks funded railroads, to argue for the sector's value to the economy.

One thing he does not touch on in this monologue is the question he was actually asked: how long does he see himself running an investment bank that, to protect the broader UBS group, has had its funded assets capped at SFr200bn (£140bn) - less than half of what he was used to at Bank of America Merrill Lynch?

He was mentioned as a potential CEO for Monte dei Paschi, the Italian bank he advised through multiple capital raises. Others think he has his eye on running UBS. Does Mr Orcel, who was UBS's highest earner in 2013 with an SFr11.4m (£8m) package, want to run his own bank?

"Of course I do," he says. Some believe UBS needs its CEO to be Swiss, like current boss Sergio Ermotti. Mr Orcel sounds willing to try to disprove the theory. "If I could be CEO of any bank in the world UBS would be a good place to start, I think this group is exceptional."

Some query Mr Orcel's abilities as a manager, citing a tendency to call colleagues in the middle of night. Since he arrived, several high-profile investment bankers have left UBS but others have been recruited.

"Yes I'm not easy, yes I'm very demanding," Mr Orcel says. "What I try to do is to never ask for something I'm not doing myself."

The latest generation of UBS bankers has different expectations. Many banks have introduced policies to lighten the load on juniors after the 2013 death of an intern at Bank of America. Mr Orcel says new recruits ask him if he is going to ban them from working weekends, or enforce a minimum number of holidays as other banks do. "My answer to this was no."

Mr Orcel insists he has never called anyone on holiday or asked anyone to cancel their leave. If bankers want to cancel their holidays themselves so they can stick around to help with a deal "I respect that choice", he says.

Since his daughter was born four years ago, Mr Orcel has been making new choices about his own work-life balance. "I have been ringfencing my dad time," he says.

That means sometimes coming home for dinner and bedtime, and then logging back on later in the evening. He still travels a lot, but sometimes brings his daughter along.

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"This is not done yet," he thought, and asked if he could explore alternatives. A week later, he suggested merging UniCredito with rival Credit Italiano. This more lucrative deal was soon done (the merged group eventually became UniCredit). "UniCredito remained for a long, long time one of my best clients."

Mr Orcel is known for his fiercely loyal clients, including the late Santander patriarch Emilio Botin, who sent him a handwritten thank you after each of the many deals they worked on.

Not all clients fared so well. Mr Orcel was one of the architects of the disastrous €72bn buyout of ABN Amro, advising the buyers Santander, Fortis and Royal Bank of Scotland. RBS and Fortis were later nationalised.

Mr Orcel says there were some aspects of the deal that should have been done differently, but insists those were different times, when banks' capital buffers were less of a concern and asset quality was not scrutinised as carefully during deals.

"Am I sorry to have done this? Yes I am, when you do something and you're really convinced and the outcome is not what you expect . . . you are sorry that it didn't come out that way," he says.

Just a few months after Mr Orcel joined, UBS said it was cutting 10,000 jobs and more than half the investment bank's assets. "The undertone was 'it's a necessary restructuring to cut with the past and to build a model from which we can build a future'," he says. "I believed in that totally. And I still believe in that."

Two months later, UBS agreed a $1.5bn fine for manipulating the Libor interest rate alongside other banks. As a result, 40 per cent of UBS's managing directors had their annual bonus wiped out.

Mr Orcel believes UBS is mending its public image. "Human beings are more forgiving than people think," he says. On the timeline for restoration: "I don't know does it take three years, does it take five, I don't think it takes 10."

Internally Mr Orcel insists his unit is well on its way to boosting credibility; it has beaten revenue and after-tax-earnings expectations in seven of the past nine quarters, as it focuses on activities that require less capital, such as advisory work.

Mr Orcel plans to boost profits by investing in talent and technology, and improving efficiency. While not his top priority, he would like a little more flexibility on capital, though he knows it is too soon to ask his board. Waiting will require skills he hones water-skiing on Zurich's lake.

"When you cross from one side to the other, you double the speed . . . it's a lot about not forcing, about controlling yourself," he says. "It completely cleans your mind." The added bonus? It only takes 25 minutes, and while he's winding down afterwards, he can make calls.

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