UBS investors gave a cautious welcome to the Swiss bank's new caretaker chief executive today after Oswald Gruebel resigned in the wake of a $2.3 billion rogue trading scandal and cleared the way for a major overhaul of the investment bank.
Shares in UBS were erratic in early trade as fund managers and analysts digested news that the job of clearing up after the crisis had been handed to Sergio Ermotti, who joined UBS in April after being passed over for the top job at Italian bank UniCredit.
Shares in UBS, which staged a relief rally late last week on hopes the UBS board might decide on a big restructuring, were up 2.8 per cent at 10.4 francs by 8.23 GMT this morning, recovering from initial losses and catching up with the European sector banking index which also rose 2.8 per cent.
"Although the new CEO will no doubt take some time to develop a restructuring plan, we believe that hopes of a much more substantial downsizing of the investment bank, freeing up significant capital, will help support the shares in the short term," said Nomura analyst Jon Peace.
Mr Gruebel (67) resigned on Saturday amid speculation that he clashed with the UBS board on strategy. Sources close to the negotiations said Mr Gruebel had wanted to keep an integrated bank combining both wealth management and investment banking.
There had been talk that UBS investment banking chief Carsten Kengeter would go rather than Mr Gruebel, though UBS chairman Kaspar Villiger said he and his team had done an "excellent job" to limit losses from the unauthorised trades.
"Gruebel didn't resign, he was pushed. But maybe it would have been better if Kengeter and the head of risk had paid," a UBS wealth management insider said.
Mr Gruebel also wanted ex-Bundesbank chief of Axel Weber to take over as chairman a year before the April 2013 date that has been announced, the Financial Times said.
The Ethos shareholder group wants the bank to call an extraordinary meeting to vote Mr Weber onto the board immediately, the NZZ newspaper reported today.
Reuters
