UBS chief executive Oswald Grübel will stress to the board of directors that he wants the investment bank to remain part of Swiss bank's "integrated banking model" in meetings today and tomorrow, sources said, after rogue trading cost the bank $2.3 billion (€1.7 billion).
Mr Grübel is under pressure to scale down, ring-fence or even split off UBS's investment banking business from its core wealth management unit to shield private clients.
"UBS wants to have an integrated banking model," a source close to the bank said. "It is a consistent message the CEO has been delivering."
A second source said Mr Grübel also delivered the same message to senior Asian executives of the bank before the executive board met in Singapore yesterday.
"One incident doesn't mean UBS will rush to sell the investment bank," a source who attended one of the meetings told Reuters.
The bank is widely expected to speed up an overhaul of its investment bank that had been planned for announcement at a November 17th investor day. Big shareholders have signalled they could wait until then while the bank completed an internal investigation, another source at the bank said.
Mr Grübel said in Singapore yesterday that he had the support of the bank's board ahead of its first meeting since announcing the loss.
UBS trader Kweku Adoboli was charged with fraud and false accounting dating back to 2008 last week, prompting criticism of the bank's control mechanisms and integrated business model.
"The view from the (executive) board is very clear. Investment banking is a very important and critical part to the overall strategy together with the wealth management," said a third source. "This one incident is annoying, it is very annoying, but that's not going to change the overall strategy."
But Mr Grübel will have to take steps to reduce investment banking risks after UBS's biggest shareholder Singapore wealth fund GIC publicly expressed disappointment and concern at the "lapses".
GIC has lost more than half of its investment in UBS since it bailed out the Swiss wealth manager in 2007.
Mr Grübel had been expected to scale back proprietary trading and fixed income operations, but not do away with them completely.
Reuters
