Cuts loom as Ermotti set to win UBS post

UBS is widely expected to name interim head Sergio Ermotti as its permanent chief executive when it updates investors this week.

It is also set to present plans to cut the size of its investment bank, where alleged rogue trader Kweku Adoboli worked, in order to focus on less risky wealth and asset management.

The bank has brought forward the appointment of Ermotti because it wants to end the power vacuum created by the resignation of Oswald Gruebel, who left in the aftermath of the $2.3bn (£1.4bn) trading scandal in September.

This would allow the new boss to outline his strategy – believed to include a bolstering of its cash equities, foreign exchange and investment banking advisory work – at the investor day on Thursday.

Ermotti could also announce an extra 1,500 job cuts, Swiss newspaper Tages-Anzeiger claimed last week.

The suave Swiss executive has been groomed as a possible successor to Gruebel since he joined UBS as head of Europe, Middle East and Africa in April from UniCredit.

He is seen as the continuity candidate who could shore up the confidence of regulators in Berne, who want to see UBS and rival Credit Suisse cut their balance sheets again.

Juerg Zeltner, head of UBS’ private bank, and Ulrich Koerner, the cost-cutting chief operating officer, were said to be angling for the job while outside candidates had included Deutsche Bank risk chief Hugo Baenziger, who insisted he was committed to his current job, and Bill Winters, the former chief executive of JP Morgan. The American has since been touted as a replacement for Antonio Horta- Osório if he is unable to return to work at Lloyds.

UBS declined to comment.