UBS chief executive Gruebel quits

Oswald Gruebel resigned yesterday as chief executive of troubled Swiss bank UBS, saying he took the blame for the $2.3 billion (Dh8.4 billion) loss run up in alleged rogue trading in its investment banking division. The bank, which said it would beef up risk controls under an accelerated restructuring of that part of its business, named its Europe, Middle East and Africa (EMEA) head Sergio Ermotti to replace Gruebel on an interim basis. Gruebel, appointed in 2009 to rebuild UBS after a near collapse, said in a message to staff: "That it was possible for one of our traders in London to inflict a multi-billion loss on our bank through unauthorised trading shocked me, as it did everyone else, deeply." The incident had global repercussions, including political ones. "I did not take the step of resigning lightly. I am convinced that it is in the best interests of UBS to approach the future with a new leader at the top," he said. Gruebel, a 67-year-old former trader who helped turn around Credit Suisse a decade ago, was brought out of retirement to try to revamp UBS after it almost collapsed in 2008 under the weight of more than $50 billion lost on toxic assets. Lost confidence UBS Chairman Kaspar Villiger said the board of directors, who met in Singapore last week, had not lost confidence in Gruebel despite the scandal and had tried to convince him to stay on to allow a more orderly succession next year. Chris Wheeler, analyst at Mediobanca said he was "very surprised" the board had agreed to let Gruebel go given the restructuring already under way at the investment bank. "It certainly puts at risk what they were trying to achieve, given it's a recovery stock and it has had four CEOs now since 2007. It could see a lot of people capitulate on their hope for an early recovery for the stock," he said. Ermotti, who Villiger said was a strong candidate to replace Gruebel permanently, told a conference call with journalists the bank would review its risk controls at group level, and an internal investigation of what went wrong at the investment bank should conclude in 10 to 14 days. More details of changes at the division, which would scale back but not exit its fixed income business, would be revealed at an investor day already planned for November 17 in New York, Ermotti said. A 51-year-old from Switzerland's Italian-speaking region of Ticino, he was already being groomed as a possible successor since he joined UBS in April from UniCredit after he was passed over in a management reshuffle at the Italian bank. Accused trader ‘sorry' The alleged rogue trader, Kweku Adoboli, was "sorry beyond words for what had happened" and was "appalled at the scale of the consequences of his disastrous miscalculations", his lawyer Patrick Gibb said at a court hearing in London on Thursday. The 31-year old did not enter a plea and was remanded in custody until a further hearing next month. Clients pulled nearly 400 billion Swiss francs (Dh1.6 trillion) — almost a fifth of client assets — from UBS after the bank was battered in the financial crisis as by a prolonged dispute with the US tax authorities, and posted the biggest annual corporate loss in Swiss history.