UBS Group CEO Oswald Gruebel has resigned in
the wake of the $2.3bn trading loss incurred by a rogue trader at
the Swiss bank’s UK investment arm.
UBS named Sergio Ermotti as interim Group
CEO.
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UBS, the world’s third-largest wealth manager
confirmed its one-bank strategy would continue – but with a
less-complex, slimmed down investment bank re-focused on serving
its wealth management clients.
UBS’s chairman Kaspar Villiger said the board
regretted Gruebel’s decision.
“Oswald Gruebel feels that it is his duty to
assume responsibility for the recent unauthorised trading incident.
During his tenure, he achieved an impressive turnaround and
strengthened UBS fundamentally,” he said.
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By GlobalData“Enormous challenges”
In a combined internal memo to staff, Ermotti
and Villiger said there would be “enormous challenges in the coming
weeks and months”, but added that the bank’s financial standing
remained “rock solid”.
“Another of our priorities will be to fully
support the independent enquiry into the unauthorised trading
incident.
“As soon as the results of it are available,
we will take the necessary steps to prevent another incident with
such far-reaching consequences to occur in our bank again,” the
statement read.
Villiger emphasised that the bank was
“committed to further expanding our global wealth management
franchise.”
He said: “The investment bank will continue to
strengthen its alignment with UBS’s wealth management businesses,
in addition to serving its corporate, sovereign and other
institutional clients.”
More European banks to slim
down?
The strategy confirmation backed up comments
made by S&P analyst Frank Braden to PBI on 23
September.
“Mostly [the bank’s] focus will be on what is
the [size] that they need in their investment bank to successfully
service their private wealth clients and not take excessive risks,”
Braden said.
“I think banks across Europe will run into
this issue with increasing regulation, they need to pick their
niche markets, invest in that and run more of a bare bones
structure in other operations,” he added.
It is too early to say how many private wealth
clients will leave the Swiss bank in the wake of its latest
reputational blow.
The trade loss by Kweku Adoboli comes as yet
another blow to the bank. Since 2008, clients have withdrawn more
than CHF200bn of asset following UBS’s government bail-out and a US
cross-border tax investigation.
