Posted on September - 25 - 2011
UBS chief executive resigns
The bank said it had appointed Sergio Ermotti, head of Europe, Middle East and Africa, to replace him for now, and that it wanted to speed up a restructuring of its investment banking business.
“Oswald Gruebel feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity,” Chairman Kaspar Villiger said in a statement.
Mr Gruebel, a 67-year-old former trader who helped turn around Credit Suisse a decade ago, was brought out of retirement in 2009 to try to revamp UBS after it almost collapsed in 2008 under the weight of more than $50 billion lost on toxic assets.
The board reconfirmed the bank’s “integrated” strategy, combining wealth management, investment bank, asset management and Swiss retail and corporate businesses, but said it wanted to accelerate a restructuring of investment banking.
“In the future, the Investment Bank will be less complex, carry less risk and use less capital to produce reliable returns and contribute more optimally to UBS’s overall objectives,” Nr Villiger said.
UBS’s board meeting, one of four regular ones per year, had originally been due to end yesterday ahead of the UBS-sponsored Singapore Formula One motor racing Grand Prix tomorrow, when executives will be trying to reassure big clients.
But deliberations continued into today by conference call after the board left Singapore yesterday.
UBS said in August it would axe 3,500 more jobs to shave 2 billion Swiss francs off annual costs, with almost half of those cuts coming from the investment bank, which had grown to almost 18,000 staff from 16,500 a year ago.
The 1.45bn loss allegedly caused by UBS trader Kweku Adoboli in unauthorised trades compares to the 4.9bn lost by rogue trader Jerome Kerviel at Societe Generale three years ago, an event that prompted calls for tighter rules and felled that bank’s then-chairman and CEO Daniel Bouton.
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