Ermotti shows the Swiss his inner steel

WE knew Sergio Ermotti was a smooth operator, but now we have an early sight of the steeliness that has taken him to the top of UBS.

In dumping Maureen Miskovic yesterday, two weeks after cutting another 400 jobs, Ermotti showed his determination to restore the reputation of UBS. The new boss will have to do a lot more, however, to restore the confidence of investors, particularly in the bank’s Swiss homeland.

There were apparently concerns about the risk division, led by Miskovic, a graduate in Russian and German rather than finance, who between 1996 and 2002 was chief risk officer at Lehman Brothers, which collapsed in 2008.

Yesterday Ermotti noticeably failed to pay tribute to Miskovic, simply thanking her for her “dedication”, and throwing his weight behind her replacement, Philip Lofts.

“He demonstrated that he has the broad skills and experience and the strong leadership needed to run our risk organisation decisively in a turbulent market environment,” he said.

Those skills will be much-needed. The share price of UBS has steadily declined from SwFr17.60 in April, when a surge in first quarter net fund inflows of SwFr11.1bn was seen as evidence of a return of client trust. Since then the bank’s stock has been driven down by the “rogue” trade and the failure to replace Oswald Grübel quickly.

More bad news will surely follow, with year-end results expected to show an exodus of wealthy clients after the scandal.

Last night shares closed down 1.88 per cent at SwFr10.97, 38 per cent off their April value. Investors will hope Ermotti has steel in his soul.