UBS AG , Switzerland’s largest bank, named an interim chief executive officer after Oswald Gruebel resigned the post in the wake of a $2.3 billion loss from unauthorized trading, Bloomberg reported.
Gruebel, who held the top job since February 2009, will be replaced on an interim basis by Sergio P Ermotti, the bank’s CEO for Europe, the Middle East and Africa. Gruebel, handed his resignation as the Zurich-based bank’s board of directors met in Singapore.
Gruebel, who joined UBS after about 37 years at rival Credit Suisse Group AG, is the only person to have served as CEO of both of the biggest Swiss banks.
Brought out of retirement to rebuild UBS after record losses, he returned the bank to profit about six months after arriving, resolved a dispute with the US over banking secrecy that thereatened the firm’s existence and stemmed nine straight quarters of client defections at the private bank. He also led an expansion of the investment bank.
Chairman Kaspar Villiger, said the board tried unsuccessfully to persuade Gruebel to remain until the shareholders meeting next year. He will be paid for a six-month notice period and have no further role at the bank.
“Carsten Kengeter, the head of UBS’s investment bank did an excellent job in covering positions after the crisis and there is no doubt about his future,” Villiger said.
UBS plans to shrink the division following the loss. Gruebel and Kengeter tried for the last 2 years to rebuild the unit into a top-tier investment bank, hiring more than 1,700 people and bringing in new business heads to replace those left or were fired.
About 45% of 3,500 job cuts announced last month were slated for the investment bank. Kaspar Villiger also said, “In the future, the investment bank will be less complex, carry less risk and use less capital to produce reliable returns and contribute more optimally to UBS’s overall objectives.”
He also said, “The investment bank will continue to strengthen its alignment with UBS’s wealth management business.”
UBS will also scale back credit businesses that haven’t been profitable and that will be affected most by the higher capital requirements under Basel III, said Cormac Leech.
UBS said it will announce more changes to the investment bank in a presentation to investors scheduled for November 17.
