Senior UBS executive quits as `defection' claims surround his team

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A SENIOR executive with Swiss bank UBS has quit amid rumours he tried to defect to a rival bank with as many as 25 of his team.

TJ Lim, currently global head of fixed income, derivatives and foreign exchange at UBS, has "decided not to take up his designated position" as head of rates, derivatives and structured products at Warburg Dillon Read, the investment bank formed by the merger of UBS and SBC, according to banking sources.

The derivatives chief has "no job lined up", according to one insider, and is likely to stay with UBS until the integration with SBC is complete at the end of June.

The resignation is the latest in a series of indications that senior executives at the two banks are uncomfortable with the merger process. Executives rumoured to be considering their positions include Hector Sants, co-head of European equities, and Andy Siciliano, global head of rates and derivatives at SBC and Mr Lim's designated boss.

It is understood Mr Lim - thought to view his appointment at Warburg Dillon Read as a demotion - approached Dresdner Kleinwort Benson (DKB) last December. Mr Lim made a presentation to DKB executives, according to banking sources, and proposed that he and as many as 25 colleagues defect to the bank.

Mr Lim's discussions with DKB are understood to have ground to a halt after he made "excessive" wage demands. One source said: "What he was asking for in profit share was more than people at Dresdner were prepared to stand for."

Mr Lim is rumoured to have proposed that his team retain more than half of their profits.

SBC sources said reports that Mr Lim was summoned to Zurich at the weekend for a dressing down from the board were inaccurate. One source said: "Yes, he went to Zurich. I believe he met Marcel Ospel [SBC's chief executive] but I understand the tone of the meeting was conciliatory ... They were trying to find some common ground but unfortunately they were unable to."

News of Mr Lim's resignation came amid speculation about the future of Hector Sants, whose name has been linked with Donaldson, Lufkin & Jenrette (DLJ), the American bank.

An SBC spokesperson declined to comment on the rumour, saying Mr Sants was still with the bank.

Speculation has also surrounded the future of Andy Siciliano. Ironically, it is understood to be Mr Siciliano's appointment as global head of foreign exchange and fixed income that helped push Mr Lim - his junior - towards DKB.

SBC is believed to have offered Edson Mitchell, head of bonds at Deutsche Morgan Grenfell, the job of head of fixed income at Warburg Dillon Read. If Mr Mitchell had accepted the job, he would have assumed most of Mr Siciliano's responsibilities.

Mr Siciliano remains with SBC for the time being, but insiders have speculated that his departure is "purely a matter of time".

Banking sources have indicated that SBC is still considering hiring someone to take over Mr Siciliano's fixed income responsibilities.