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UBS boss wants investment bank overhaul


UBS boss wants investment bank overhaul


In the aftermath of a rogue trader allegedly losing UBS 1.7 billion euros, the Swiss bank’s Chief Executive, Oswald Gruebel, will ask its board to back plans for a radical overhaul of UBS’s investment banking arm.

Reportedly Gruebel wants to scale back in some trading areas.

However bank sources say it will not be rushed into dumping the investment business by the latest scandal.

Several sources with direct knowledge of the plans said Gruebel will make his request as the UBS board meets in Singapore on Wednesday and Thursday for one of the four regular meetings it holds every year.

The bank’s biggest shareholder, Singapore-based sovereign wealth fund GIC, said it had discussed the alleged fraud with UBS management, adding it was disappointed by the case and urged UBS to take “firm” action to restore confidence.

GIC, which has a 6.4 percent stake in UBS and has lost about 77 percent of its 11 billion Swiss franc investment in the bank, said it had sought details on how UBS was tightening controls.

Gruebel said on Sunday he would “bear the consequences” of the trading loss that was discovered last week but did not want to quit, adding the affair would influence the future strategy of the investment bank.

The loss is a heavy blow to the reputation of Switzerland’s biggest bank, which had just started to recover after its near collapse during the financial crisis and a damaging US investigation into its aiding wealthy Americans to dodge taxes.

London trader Kweku Adoboli was charged on Friday with fraud and false accounting dating back to 2008.

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