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Viability of UBS’ online energy trading in doubt
The future of UBS Warburg Energy’s online energy trading service UBSWenergy.com is in question, as the company took the trading website offline on December 10 and prepared to lay off 290 of the Swiss bank’s 380 Houston-based energy employees. Ninety employees will be offered positions at the bank’s 3,000-strong Stamford, Connecticut trading floor, as UBS consolidates energy operations into its other trading businesses.
UBS Warburg Energy is continuing to maintain all products and markets via telephone. “The only thing that will change is that you can no longer do business with us online [until the end of the evaluation period],” said the spokeswoman. Asked if closing the online platform would result in a decline in business, Walker said UBS anticipated its customers would do the same business by telephone. No figures are available for UBSWenergy.com’s volumes, although a New York-based broker, who asked not to be named, told RiskNews in September that UBS had made a slow start in electricity trading. “Their online system has also been pretty vacant,” he said.
UBS acquired EnronOnline in February 2002. No cash changed hands, with the deal based instead around a royalty payment based on future pre-tax profits from the group. According to Walker, the consolidation of energy operations to Stamford does not change the deal with Enron. “UBS had pledged one third of all future pre-tax profits to Enron – and this agreement with Enron is unchanged. Energy remains a separate business entity.”
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