Any new U.S. unit boss may be early sign UBS to sell

By Lisa Jucca and Victoria Howley - Analysis

ZURICH/LONDON (Reuters) - Any change at the top of UBS's (UBSN.VX) U.S. wealth management business could signal the Swiss bank is trying to rehabilitate its America franchise after a bruising tax row, ready for an eventual sale.

The name of former Merrill Lynch high flyer Robert McCann has emerged repeatedly as a possible candidate for UBS's (UBS.N) top wealth management job in America, and CNBC said on Thursday the appointment would be announced by month end.

"UBS is not satisfied with the development of the U.S. wealth management business," said Rainer Skierka, an analyst at Bank Sarasin.

"There were rumours already some time ago that the current head of the business would be replaced in the context of the whole strategic positioning."

"You can also hire somebody to sell the business," he added.

UBS spokesman Christoph Meier declined to comment directly on the CNBC report, but stressed that Chief Executive Oswald Gruebel had said just two weeks ago the board was "fully committed to Wealth Management Americas" and that the bank wanted to grow its U.S. business.

A banking source that covers the asset management industry said he was not aware of any ongoing process to sell the U.S. wealth management division.

"If I were McCann, I would not take on the top job if the business were to be sold soon; that would create too much uncertainty," the banker said.

UBS reviewed all its business units in 2008 and considered a sale of the former PaineWebber among various possible business options, but dropped the idea.

Gruebel told the Financial Times in an article published on September 29 that UBS had had many inquiries from potential buyers, but valuations were too low. The article sparked much talk about the future of the U.S. franchise.

"We believe that they are trying to sell it. Maybe they need a new man to do it," said Helvea analyst Peter Thorne.

STILL STRUGGLING

The Swiss bank made a big push into the United States, still the largest market in terms of millionaires, in 2000 when it acquired the PaineWebber franchise for about $10 billion.

But the Swiss bank has struggled to make it profitable, and the unit suffered client outflows of 5.8 billion Swiss francs ($5.6 billion) in the second quarter following U.S. tax litigation that UBS has since settled.

"They have been trying and trying," said Andreas Venditti, an analyst with ZKB