Investors welcome new UBS CEO

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Investors welcome new UBS CEO

Investors welcome new UBS CEO
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UBS investors have welcomed the Swiss bank’s choice of caretaker chief executive, Sergio Ermotti.

Its shares rose after Oswald Gruebel quit to take the blame for a rogue trading scandal at UBS. His resignation clears the way for a major overhaul of its investment banking operations.

Ermotti, who has experience both in investment

banking and wealth management, joined UBS in April after being passed over for the top job at Italian bank UniCredit.

The 67-year-old Gruebel resigned on Saturday saying he was taking the blame for the scandal. But there was speculation he had clashed with the UBS board on strategy. Sources close to the negotiations said Gruebel had wanted to keep an integrated bank combining both wealth management and investment banking.

“We suspect the board’s desire to downsize the investment bank had more to do with it as Gruebel seemed reluctant to do that,” said Helvea analyst Peter Thorne.

DZ Bank analyst Matthias Duerr said the bank needed a radical new strategy if it was to minimise a loss of confidence.

“We believe a significant reduction of the size of the investment bank or its complete divestiture is likely to become increasingly necessary,” he said.

There had been talk that UBS investment banking chief Carsten Kengeter would go rather than Gruebel, though UBS Chairman Kaspar Villiger said he and his team had done an “excellent job” to limit losses from the unauthorized 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.