July 9, 2019 / 7:14 AM / 15 days ago

UBS Australia's 'rock star' banking chief Matthew Grounds to leave

SYDNEY (Reuters) - The head of UBS (UBSG.S) in Australia and New Zealand, Matthew Grounds, is leaving the Swiss bank at the end of the year, a spokeswoman confirmed on Tuesday, possibly ending one of the most storied careers in Australian investment banking.

FILE PHOTO: A man walks past a UBS logo projected on a screen in Singapore, January 14, 2019. REUTERS/Feline Lim/File Photo

Grounds, 49, who brokered some of the most talked-about deals of post-financial-crisis Australia over his 11-year stint as CEO, will spend the next six months handling a leadership change to UBS investment banking head Anthony Sweetman and chief operating officer Nick Hughes, the spokeswoman said.

“This is not a decision that Matthew has taken lightly, but he considers this is the right time given the current strong performance of the business and the opportunities that this will provide for the next generation of leaders,” said an internal memo seen by Reuters and confirmed by the spokeswoman.

Grounds declined to comment when contacted by Reuters.

The departure is a second shake-up in two days for the Australian investment banking industry, after Deutsche Bank AG (DBKGn.DE) began laying off dozens of local staff on Monday as part of a global restructure.

Grounds played a leading role in some of Australia’s costliest M&A deals and was frequently sought out by its major banks for advice.

UBS under Grounds’s leadership advised mining giant BHP Group Ltd (BHP.AX) on a 2001 merger with Anglo–Dutch Billiton Plc to create the world’s biggest miner and one of Australia’s largest companies.

From 2014, Grounds’s UBS advised the government on Australia’s biggest privatization sale, the electricity infrastructure of New South Wales state.

That appointment led to Grounds testifying in parliament after UBS was accused of changing a supposedly independent report about the sale from skeptical to positive, according to media reports.

Grounds was also in charge when UBS made A$1.2 billion ($834.5 million) in loans to Papua New Guinea in 2014, which the government used to buy shares of oil and gas producer Oil Search Ltd (OSH.AX).

The deal soured when Oil Search shares fell sharply and Papua New Guinea was forced to sell them at a loss. Authorities in Switzerland and Papua New Guinea are investigating whether the government followed its own borrowing rules in agreeing to the loan.

UBS has said it does not comment on specific client transactions but adheres to strict standards in due diligence and execution.

The firm held the top position in league tables for equity capital markets (ECM) and investment banking fees for M&A in the first six months of 2019, ahead of Macquarie Group Ltd (MQG.AX) and Goldman Sachs Bank AG [GLDSH.UL], according to Refinitiv data.

In 2012, another year when UBS was the country’s top dealmaker, Reuters reported that Grounds pulled off a bonus protection deal to quarantine executives from budgeting cutbacks affecting the rest of the company’s global operations.

The bonus arrangement, known as the Kangaroo Deal, ended in late 2018, the Australian Financial Review reported on Tuesday.

Another thing that ended for Grounds in 2018 was his friendship with James Packer, the billionaire founder of casino operator Crown Resorts Ltd (CWN.AX), according to reports in The Australian newspaper.

Packer had made Grounds executor of his will and godfather to one of his children, but the relationship soured over Grounds’s handling of Packer’s personal finances, the paper reported.

In 2012, though, the Australian Financial Review quoted Packer as calling Grounds a “rock star”.

Reporting by Byron Kaye, Paulina Duran and Tom Westbrook; Editing by Darren Schuettler and Stephen Coates

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