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Former UBS chief Oswald Gruebel, 67, had left retirement to help the Swiss bank. He has resigned amid a $2.3 billion loss. |
UBS chief executive resigns on rogue trading loss
He says move lets bank start again
GENEVA - UBS chief executive Oswald Gruebel has resigned because of a $2.3 billion rogue trading loss, the bank said yesterday. Gruebel’s decision was an attempt to allow UBS to start afresh after the latest major scandal to hit Switzerland’s biggest bank, it said.
Sergio P. Ermotti, chief at UBS Europe, will take over immediately as interim chief executive until Gruebel’s replacement is appointed, the bank said.
UBS’s president, Kaspar Villiger, said in a conference call with reporters that the board regretted Gruebel’s decision to resign but had decided to accept it.
“Oswald Gruebel feels that it is his duty to assume responsibility for the recent unauthorized trading incident,’’ he said. “It is testimony to his uncompromising principles and integrity.’’
London-based UBS trader Kweku Adoboli was arrested last week and charged with fraud and false accounting involving the $2.3 billion loss. A judge ordered him Thursday to be held in jail until a hearing next month.
Villiger said the board had tried to persuade Gruebel to stay until the bank’s annual shareholder meeting next year, but the gruff-voiced German had wanted to send a strong signal about the trading loss immediately.
“He thinks that this act could maybe create a new basis for UBS to continue,’’ said Villiger, who earlier noted that UBS wants to “turn this disaster into an opportunity.’’
Villiger said Gruebel, who was brought in more than two years ago to help revive the fortunes of the Zurich-based bank, had achieved “an impressive turnaround and strengthened UBS fundamentally.’’
At the time of Gruebel’s appointment, the bank had suffered an unprecedented loss from investments in the subprime mortgage market and become embroiled in an embarrassing US tax evasion case.
The 67-year-old German, who came out of retirement to lead UBS, steered the bank back to profit and resolved the US tax evasion case, though not without blowing a hole in Switzerland’s storied tradition of banking secrecy.
As head of UBS he also accepted new Swiss government rules that require the bank and its rival Credit Suisse to hold far greater capital reserves to prevent a possible collapse in a banking crisis.
“He steps down having helped make UBS one of the world’s best capitalized banks,’’ Villiger said.
The announcement also noted that the board, which met in Singapore last week, would take steps to prevent any rogue trading loss from recurring.
UBS said yesterday that it would hold on to its integrated strategy, but that the investment bank’s business would be simplified to ensure that there is less risk, using less capital to produce more reliable returns.
Asked if investment bank chief Carsten Kengeter would keep his job, Villiger said: “I do not see any reasons to doubt the future of Carsten Kengeter.’’
© Copyright 2011 Globe Newspaper Company.
