[ by Melanie Gretchen ]

UBS CEO Sergio Ermotti isn't having an easy time at the Swiss bank.

Since Mr. Ermotti, 52, took the reigns from Oswald Grubel a year ago, his efforts to make big cutbacks, especially in investment banking, haven't been able to break through rifts among top UBS managers.  Here's the lay of the land:

The Upper Echelons of UBS

• Mr. Ermotti: scarcely visible outside the bank, the CEO is occupied trying to build support for a more forceful restructuring
• Axel Weber: a frequent public speaker on the eurozone, the chairman is criticized within UBS for his absences at a time when senior figures are wrangling over tough strategic choices.
• Carsten Kengeter, investment banking head, and Andrea Orcel, a prominent merger and acquisitions specialist,(poached from BofA) who co-run the investment banking unit
• Juerg Zeltner, private bank head, who lobbied for the top job last September and Lukas Gaehwiler, Switzerland CEO: critics of Mr. Ermotti, though supporters of deeper cuts at UBS
• Ulrich Koerner, COO and an unsuccessful Ermotti challenger for the top job a year ago, dubbed this week the "shadow CEO" of UBS by Swiss banking website Inside Paradeplatz, referring to to the COO's wide influence and Ermotti's lack of public profile in Switzerland.

What Can We Expect from UBS's future

• restructuring moves exceeding the 3,500 jobs the bank has until now said it will cut
• internal discussion of proposals for more centralization, which would reduce the division heads' responsibility
• the public disclosure of further restructuring steps as soon third-quarter earnings are announced on 10/30/12, in addition to planned cuts of 2 billion francs by end 2013

Word on the bank:

• "Top management isn't unified at all, and that is now Weber and Ermotti's big challenge. Sergio has ruffled some feathers, especially with people who fear their fiefdoms might be curtailed." - a top banker at UBS.
• "Ermotti hasn't consolidated his hold on power and is by nature more collaborative than Gruebel was, which has inadvertently fostered infighting" -- another UBS top banker.
• "I believe UBS has been very busy trying to pull costs out of the business, especially investment banking, and wouldn't be surprised if we get a mini-strategy update around third-quarter results which gives more flesh to how much further they can go in cost-reduction." -- Jon Peace, an analyst at Nomura who rates UBS stock at buy with a 17 franc target price.
• "I don't want to lull anybody into thinking better times are coming. Instead, I want to adjust our business model to the new reality." -- CEO Ermotti, in an interview with the Swiss Finanz und Wirtschaft newspaper last month.

Looking ahead, Mr. Ermotti said, "We want to earn a return on equity of 12% to 17% for our shareholders and be our clients' first choice. We will do everything necessary to reach that goal."  [C-I Note: He has a lot of ground to cover, considering UBS's return on equity was a paltry 4.7% in the first half of 2012.]

For further details, go to [Reuters, 10/8/12].