LONDON - UBS Warburg plans to invest $200 million to $300 million a year to gain market share in investment and private client banking in the United States, chief executive John P. Costas said at a conference here Tuesday.
Mr. Costas said the expenditure would cost "a couple of basis points in the cost-income ratio."
Some of the money would be earmarked for strategic hires, Mr. Costas said. But he ruled out large acquisitions, saying this is the most turbulent period he had seen in his 21 years in the industry.
UBS Warburg has already made a strategic hire in Sen. Phil Gramm, who announced Monday that he will join the unit of Zurich-based UBS AG as a vice chairman in early 2003. The Texas Republican had announced in September 2001 that he would retire in January after the end of his third Senate term.
Speaking at an investment banking conference organized by Merrill Lynch & Co., Mr. Costas predicted it would take three to five years for the market to return to levels seen in the late 1990s.
Commenting on regulator scrutiny of Wall Street firms, Mr. Costas said the changes that will ultimately be required of the big investment banks will probably cause clients' costs to rise, though he said he sees no major restructuring.
In light of scandals involving analysts' tipping stocks to win investment banking business, investment banks are expected to be told to separate their research departments from corporate finance business.
