UBS REPLACES CEO
BERN, Switzerland – Troubled Swiss banking giant UBS AG suddenly replaced its CEO on Thursday, appointing Oswald J. Gruebel – former head of crosstown rival Credit Suisse Group – to take over immediately.
Gruebel’s experience in leading Credit Suisse through a turnaround before he left the company two years ago will prove invaluable, UBS said. He replaces Marcel Rohner, who has resigned.
“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 a statement from the Zurich-based bank.
UBS, one of the pillars of Switzerland’s crucial banking industry, has had massive losses related to the U.S. subprime mortgage crisis. Earlier this month, UBS reported a full-year loss of 19.7 billion Swiss francs ($18.41 billion) for 2008, the biggest loss in Swiss corporate history.
The bank is also facing legal pressures in the United States over allegations it has helped wealthy Americans evade U.S. taxes, and has seen confidence by investors, shareholders and clients erode recently.
UBS is also receiving heavy financial support from the Swiss government in its attempts to recover the losses.
Gruebel said his top priority will be regaining the trust of clients and investors, followed by restoring the bank’s profitability. In an internal memo to staff he announced he was planning considerable cost-cutting measures, without elaborating.
Traders on the Zurich exchange welcomed the personnel move. UBS shares opened at 11.93 ($9.71), up 12.20 percent over Wednesday’s close.
Gruebel, who from 2003 to 2007 was co-CEO and then CEO at Credit Suisse, said he was convinced that Switzerland needs 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.
He said he would do all he could “to bring UBS back on a profitable, successful track.”
In a staff memo provided by the bank, Gruebel warned that the economic situation would require further considerable cost-cutting measures.
“Here too, I ask for you support,” he said.
The bank recently announced it would cut some 2,700 jobs, on top of 6,000 positions already shed since the third quarter of 2007.
UBS Chairman Peter Kurer said Gruebel “brings the ideal skill set to recreate value, together with our management team, for our shareholders and clients. He will also be adept in balancing our focus on prudent risk taking and client confidence, and our goal to position UBS for future success.”
Kurer said Rohner had told the bank’s board in January of his intention to step down after restructuring moves.
The United States’ Internal Revenue Service is seeking to force UBS to turn over records for an estimated 52,000 U.S. customers who allegedly violated American tax laws by concealing Swiss accounts worth at least $14.8 billion.
UBS already has agreed in a deal with the U.S. Justice Department to pay $780 million and disclose up to 300 UBS account holders suspected of tax fraud.
Gruebel told staff the bank had to stick strictly to the law in order to protect its reputation.
“Abiding by existing laws and regulations in all business areas and world markets in which we operate is essential,” he said.