Comment: Problems multiply at SBC Warburg

Problems multiply

at SBC Warburg

Nobody ever pretended that merging Swiss Bank Corporation with SG Warburg was going to be easy but judging by the present turmoil the problems of doing so seem to have been multiplying. With most of the other City takeovers, the old guard is being allowed to carry on running the show much as before. That was never likely to be the case with the SBC takeover. Warburg was on its knees and anyway Swiss Bank already had a substantial investment banking operation in London that had to be accommodated within the new grouping.

None of this seemed to stop Warburg's old guard from believing it would continue in the driving seat. Over the past couple of weeks, that dream has been shattered. Swiss Bank has moved to eradicate all traces of the old Warburg culture and impose its own people and way of doing things on the new organisation. Even Sir David Scholey, chief architect of the modern Warburg's, is stepping down as chairman of the key investment banking committee.

Many of the other key management positions are being denied to former Warburg bigwigs too. All those hefty retention fees negotiated at the time of the takeover seem to be proving a waste of money. So far as corporate finance is concerned, SBC doesn't appear to want to keep them anyway. The latest upheaval has put noses so seriously out of joint that many are threatening to resign, though perhaps significantly, none have yet done so.

There are two ways of looking at what SBC is doing. Certainly such radical reoganisation cannot but help put key client relationships at risk. Bringing on younger people, imposing more professional management and reporting structures may be what the textbooks say should be done, but if half your business is going to walk as a result, it may not be such a good idea.

Alternatively, it may be that the old organisation was so fundamentally in need of reform that only a radical approach could stop the rot. SBC Warburg will no doubt one day emerge as a powerful corporate finance force once more but it is proving a long haul. Its new masters back in Zurich must certainly be wondering whether they got the better half of the deal when they paid pounds 860m for the bank. Potential bidders for Gartmore beware. Fund management, as much as investment banking, is all about people, name and pulling in the business. These are not easy businesses to manage.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea