Rohner resigns as UBS chief executive

26th February 2009, Comments 0 comments

UBS appoints former Credit Suisse chief Gruebel as new CEO.

ZURICH - Swiss bank UBS on Thursday chose Oswald Gruebel, a former chief executive of Credit Suisse, to replace chief executive Marcel Rohner after his resignation.

Gruebel's appointment "represents a further step to restore stakeholder confidence and to pave the way back to success," said a UBS statement.

The move increased UBS shares, raising it 14.85 percent at the open to CHF 11.60.

Switzerland's biggest bank UBS lost billions in the United States subprime mortgage crisis and the financial consequences, and is also in a legal dispute with the US over a tax evasion inquiry.

Rohner was promoted in July 2007 from his deputy CEO position to replace Peter Wuffli as CEO when difficulties in the US subprime mortgage market emerged.

But as the bank's troubles deepened, with a record loss of about USD 17 billion (CHF 20 million) for 2008 and legal troubles, Rohner himself was pressured by critics to resign.

UBS chairman Peter Kurer revealed that Rohner informed the board of his intention to resign in January, as the transition of its investment bank unit, which was blamed for most of its losses, ended.

The bank is now expecting Gruebel, who headed Switzerland's second biggest bank Credit Suisse between 2003 and early 2007, to restore its business.

"With his previous employer Credit Suisse, Mr Gruebel was the architect of a successful turnaround and restored confidence in the company in turbulent times," said UBS.

Credit Suisse posted a full-year loss in 2002 due to restructuring costs and legal charges from the Enron scandal as well as the independence of its research analysts. The bank returned to profitability in 2003, with Gruebel leading.

UBS said Gruebel's banking experience, as well as experience in leading a bank through a transformation would be "invaluable to UBS in this challenging environment."

Gruebel said he would "do all I can" to return UBS to profitability.

"I am convinced that the Swiss financial centre requires the presence of more than one big global bank.

"The opportunity to lead UBS with its unique client franchise in wealth management, investment banking and asset management in these extraordinary times presents a fascinating, yet formidable challenge to me," he said.

The appointment was welcomed by analysts.

Bank Vontobel's Teresa Nielsen said, "We see the choice of Mr Gruebel as highly positive, not only for UBS but also for the finance centre of Switzerland.

"We are convinced that the choice of management change to Mr Gruebel will accelerate the current transformation process of UBS which is highly positive."

UBS posted a record annual loss of about USD 17 billion (CHF 20 billion, EUR 13 billion) for 2008, the largest full-year loss in Swiss corporate history.

It is also under investigation by the United States for tax fraud.

Earlier in February, UBS provided data on 250 to 300 clients to the US government and paid a fine of USD 780 million to settle a case of assisting tax fraud by US clients.

A day later, the US government filed a separate lawsuit to force UBS to reveal the identities of 52,000 US customers who allegedly evaded taxes.

AFP / Expatica

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