UBS bank's revamp after trading scandal to take years
Sep 25, 2011, 8:13 a.m.
By Catherine Bosley
ZURICH (Reuters) - Reorganising the investment bank at UBS will take two to three years to complete, its chairman said on Sunday, a day after Chief Executive Oswald Gruebel quit over the $2.3 billion rogue trading scandal.
The UBS board on Saturday accepted the resignation of its 67-year-old German-born chief executive and appointed as his interim replacement Sergio Ermotti, 51, who hails from Switzerland's Italian-speaking region of Ticino.
The board is looking at both internal and external candidates to fill the post permanently and Chairman Kaspar Villiger has said ex-Bundesbank head Axel Weber has already been involved in the CEO selection process as an independent advisor.
But Weber is still not due to take over as UBS's chairman until 2013, Villiger said.
Switzerland's biggest bank has asked the dapper, multi-lingual Ermotti, who was passed over for the CEO job at Italy's UniCredit, to speed up a scaling back of the investment bank.
"Revamping the bank will probably take the next two or three years until it's all completed," Villiger told the NZZ am Sonntag.
He also said that Ermotti, who joined UBS in April as head of Europe, Middle East and Africa, and has worked in London and New York, is a strong candidate to remain as CEO.
"He has lots of experience and brings a lot of what's needed to run the bank. I also think it's good that he's Swiss," Villiger said.
With the Swiss public losing its patience with UBS after a series of crippling crises, Ermotti's nationality may give him an edge over competitors and help him deal with politicians and regulators.
"He's a professional, open to the bureaucrats and Swiss concerns, but beyond any patronage," Der Sonntag quoted the Swiss financier Tito Tettamanti as saying.
Meanwhile Villiger, a former Swiss finance minister who also faced calls to resign over the scandal, said in a conference call with reporters on Saturday that the bank was sticking to plans for Weber to join the board next year and take over as chairman in 2013.
He reiterated that point on Sunday.
"It's not optimal for the president and the chief executive to step down at the same time. This way Axel Weber has the chance to get up to speed, Villiger told the NZZ.
"He'll also live in Switzerland and get to know the Helvetic characteristics. We see no reason to change this plan."
Gruebel, a banking industry veteran who helped turn around UBS's rival Credit Suisse, was brought out of retirement to revamp UBS after it almost collapsed in 2008 under the weight of more than $50 billion lost on toxic assets.
In a memo to staff Gruebel said the trading loss had shocked him deeply and that it was in the bank's interest to move ahead with someone new at the helm. Villiger said he had asked Gruebel to stay.
Gruebel initially wanted to stay on and decided to make his exit only in the course of board meetings in Singapore, when he realized some board members no longer backed him, the German-language SonntagsZeitung said, citing UBS insiders.
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