Warburg in culture shock

Swiss Bank Corporation says innovation will be the key for merged venture with established City bank

THE buccaneering style that has made Swiss Bank Corporation one of London's most controversial financial advisers will be adopted by the newly created SBC Warburg, the man set to run the combined operation has made plain.

Marcel Ospel, who will become chief executive of the new combine if SBC's £800m bid for Warburg's investment banking business goes through, put the emphasis on innovation and applauded the man responsible for many of SBC's most contentious deals.

Asked whether the new corporate finance department will lean towards the SBC culture or that of Warburg, now a by-word for correctness, Mr Ospel replied: "It will be an innovative new bank, to be built on the strong client-oriented Warburg culture, properly merged with the strong risk-management and resources of SBC."

Wasrburg's Mark Nicholls will head the combined corporate finance department. However, it is significant that Mr Ospel, a Swiss national who previously worked in SBC's London office 15 years ago, stood by a senior member of SBC's corporate finance team, Brian Keelan, who has generated numerous complaints over the past 30 months.

"Sure, Mr Keelan will be staying," Mr Ospel insisted. "He is a very good operator, and I know he will work well with the Warburg people."

Yet it is only just over a year since Warburg's Sir David Scholey, who will be chairman of SBC Warburg, was complaining to Rodolfo Bogni, SBC's London head, about Mr Keelan's behaviour concerning a planned £750m rights issue by Eurotunnel, the Channel Tunnel operator. Last year, rival merchant banks complained about SBC's conduct to the Bank of England, the London Stock Exchange and the Securities and Investments Board.

In April 1994, Sir Alastair Morton, joint chairman of Eurotunnel, issued a statement accusing Mr Keelan of making statements that were "improper, incorrect and unauthorised". He went on to stress that Mr Keelan would play no part in the underwriting of the rights issue.

SBC has been involved in several other situations where it has tried to elbow established advisers out of the way with innovative or better- priced fund-raising schemes.

In November 1992, it advised on Granada Group's failed attempt to buy the Gardner Merchant catering business from Forte. Five months later, it helped Granada buy Sutcliffe Catering from P&O. Granada's usual merchant bank is Lazard Brothers. In February 1993, SBC underwrote a slice of a £204m rights issue by Trafalgar House, cutting out the company's traditional advisers, UBS, and the powerful stockbroking firm of Cazenove.

On several occasions later that year, SBC then undercut the Barclays Bank securities offshoot, Barclays de Zoete Wedd, in a plan to buy shares issued to investors instead of cash dividends.

In October 1993, SBC helped Hongkong Land increase its stake in Trafalgar House from 15 per cent to 25 per cent. Four months on, SBC and the merchant bank Robert Fleming defied convention when they staged an auction to place unclaimed shares from Trafalgar's latest £425m rights issue. UBS and Cazenove were again left on the sidelines.

SBC and Mr Keelan have delighted in attacking the City establishment. "The old school tie still runs the City," Mr Keelan claimed last year.

"They take rumps of rights issues and share out the proceeds through underwriting and sub-underwriting. It's a scandal . . . it's outright theft."

Mr Ospel, an urbane SBC careerist, is embarking on a "hearts and minds" campaign to hold on to key Warburg staff. His press adviser Kerry Underhill reported that Mr Ospel received a standing ovation when he addressed Warburg staff on Thursday. But Warburg bonuses for the year to March - in themselves a handsome gesture after a year in which the group lost £16.9m pre-tax - are being delayed for several weeks.

Mr Ospel is expected to use that time to persuade Warburg executives of the rosy prospects at the merged SBC Warburg. He will also outline a new incentive scheme made up of cash, SBC group shares and "phantom shares" in SBC Warburg. That will be a subsidiary of SBC, but will have its own profit-and-loss account from which an equity value can be calculated.

Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
peopleMathematician John Nash inspired the film Beautiful Mind
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine