UBS chief to seek confidence vote after rogue trade: report

20th September 2011, Comments 0 comments

Banking giant UBS is to hold a board meeting in Singapore on Wednesday when it will decide whether to maintain support for chief executive Oswald Gruebel after a rogue trading case, a Swiss press report said on Tuesday.

According to Swiss newspaper Tages Anzeiger, the board will make two key decisions: "first the strategy of the company, and secondly the person himself Gruebel."

Gruebel is seeking a confidence vote from the board to decide if he should stay on until early 2013 to lead the restructuring of the bank, said the newspaper.

When contacted, a UBS spokesman confirmed the meeting in Singapore, but said it had been planned long in advance. The spokesman would not comment on the other information in the report.

UBS alleged on September 15 that a rogue trader had lost the bank $2.0 billion (1.5 billion euros) in unauthorised trades, sparking questions about the adequacy of the firms internal controls as well as its strategy to maintain the investment bank.

That loss estimate was later revised upwards to $2.3 billion.

Pressure has mounted on Gruebel over the incident, with politicians in Switzerland calling for his resignation.

Gruebel has however told a Sunday newspaper that he was not planning to resign over the fraud, although he acknowledged that any executive changes were a decision of the board.

Tages Anzeiger noted that as the meeting is held in Singapore, the firm would be able to consult one of its biggest shareholders -- sovereign wealth fund Government Investment Corp.

GIC said in a statement that it had discussed the rogue trading case with UBS management.

"GIC expressed disappointment and concern at the lapses and urged UBS to take firm action to restore confidence in the bank," it said.

It affirmed however its confidence in the bank.

"GIC's view of UBS' fundamental strength as a well-capitalised bank with a strong private wealth management franchise remains unchanged," it said.

Meanwhile, Tages Anzeiger said that proposed plans for the bank's restructuring include cutting a third of risky assets, which currently stand at about 130 billion francs.

Swiss media are speculating that a possible successor for Gruebel could be Sergio Ermotti, who left Unicredit in April to join UBS as the head of its European business.

© 2011 AFP

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