UBS shake-up may take three years

THE SHAKE-UP of the investment bank at UBS will take two to three years to complete, its chairman said yesterday after the resignation of Oswald Gruebel.

Kaspar Villiger has asked interim chief executive Sergio Ermotti to quicken a scaling back of the investment bank so details can be revealed at the bank’s investor day on 17 November.

“Revamping the bank will probably take the next two or three years until it’s all completed,” Villiger said. He also highlighted Ermotti’s experience and Swiss nationality as advantages should he be named chief executive.

Former Bundesbank boss Axel Weber, who is due to join the board next year and become chairman in 2013, has already provided advice in the search for a permanent chief executive.

The bank is looking at candidates inside and outside UBS and expects to make an appointment within six months.

Yesterday Ermotti condemned the “totally unacceptable” risk exposure that led to UBS’ $2.3bn (£1.5bn) loss and said an internal investigation into Kweku Adoboli’s alleged fraud will be completed within 10 to 14 days, although it is not certain that the findings will be made public.

Ermotti also pledged to show “humility and energy” in the job and said he would review the bank’s risk controls.

“We are aware that we are facing turbulent times externally and this latest incident is only adding much more necessity for us to react. But let’s not forget that UBS is one of the best capitalised banks worldwide,” he said.

Ermotti 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, but some analysts have questioned whether he has sufficient gravitas for the top job.

Villiger said he had no doubts about the future of investment bank head Carsten Kengeter, whose fate had also hung in the balance, but declined to comment on whether he could still be a candidate for chief executive.

10 December 2007
Bank announced a $10bn write-down related to US sub-prime mortgages and a massive injection of funds from Singapore and the Middle East

6 May 2008
UBS says it will axe 5,500 jobs and sell billions of dollars of assets in a bid to break free from the subprime crisis. It also launches a $15.6bn rights issue

10 February 2009
UBS posted annual loss of CHF19.7bn, the largest in Swiss history, and said it would cut a further 2,000 investment banking jobs

26 February 2009
Oswald Gruebel, former Credit Suisse chief executive and the man credited with its turnaround, takes the top job at UBS

15 September 2011
UBS trader Kweku Adoboli faces criminal charges over $2.3bn losses

15 September
Kweku Adoboli, a 31-year-old specialist in exchange traded funds, arrested on suspicion of $2bn fraud at UBS offices

16 September
Adoboli weeps in court after being charged with fraud and false accounting dating back to 2008

18 September
UBS raises the amount it lost on “rogue” equity trades to $2.3bn

20 September
Major shareholder The Government of Singapore Investment Corp expresses “concern” and urges the bank to take “firm” action to restore confidence

22 September
Adoboli appears in court again and his barrister says the trader is “sorry beyond words for what happened”

24 September
Oswald Gruebel resigns as chief executive and the board names Sergio Ermotti, head of Europe, Middle East and Africa, as an interim replacement

25 September
Chairman Kaspar Villiger says reorganising the investment bank will take two to three years to complete