GENEVA - Swiss banking giant UBS announced Saturday
the resignation of chief executive Oswald Gruebel, less than two
weeks after the bank was rocked by a rogue trading scandal that
lost it $2.3 billion.
Switzerland's largest bank said in a statement that its board of
directors had accepted Gruebel's resignation.
Sergio Ermotti has been named as interim CEO effective immediately,
the statement said, nine days after the arrest of Kweku Adoboli, a
UBS trader accused of a 1.7 billion euro fraud.
UBS Chairman Kaspar Villiger said in the statement that while the
board "regrets" his resignation Gruebel "feels that it is his duty
to assume responsibility for the recent unauthorised trading
incident."
Villiger praised Gruebel for "his uncompromising principles and
integrity", and acknowledged that during his tenure "he achieved an
impressive turnaround and strengthened UBS fundamentally."
The board also said it would "fully support" the independent
investigation into the rogue trading and would ensure that
"mitigating measures" were implemented to prevent such incidents
from recurring.
Swiss media speculation had been mounting that Gruebel would be
ousted at the long-scheduled UBS board meeting held in Singapore in
the run-up to Sunday's Grand Prix -- the bank is a major sponsor of
Formula One racing.
Reports said Gruebel was expected to seek a vote of confidence
during the meeting, with the bank under pressure from shareholders
and some Swiss politicians over the rogue-trading scandal.
But Villiger, shortly after the statement was released, told
journalists the UBS board did not want Gruebel to step down
immediately, and would have preferred he stayed on until a key
shareholders' meeting, set for the spring of next year.
But for Grubel, staying on until next year would not have sent a
strong enough signal regarding his responsibility for the scandal,
and so he chose to resign now, Villiger explained by phone from
Singapore.
When contacted by the media, a spokesperson from the Government of
Singapore Investment Corporation (GIC) declined comment on news of
Gruebel's resignation.
The GIC is UBS' largest shareholder.
Earlier this week, it urged board members to act to restore faith
in UBS.
It had also issued a rare public rebuke to the bank, saying it has
asked UBS for details on how it planned to tighten controls.
UBS had turned to Gruebel, a former Credit Suisse boss, to stem its
record losses amid the global financial crisis and seek a way out
of its bitter tax evasion spat with the United States.
Gruebel, 67, had engineered Credit Suisse's own recovery in the
early 2000s, after the bank took massive charges arising from the
Enron scandal. Within a year, the bank returned to
profitability.
Likewise at UBS, Gruebel managed to restore the bank's
profitability around 18 months after he took over the helm.
Within minutes of taking the reins at UBS, he told his staff that
massive cost cuts were imminent and since 2009, proceeded to slash
thousands of jobs, trimming a bank that was getting too large to
govern.
Investors heaved a sigh of relief when the bank not only became
profitable again in the third quarter of 2010, but also stemmed an
outflow of client assets for the first time since the financial
crisis.
However, Gruebel has now been forced to resign after UBS was hit
with an internal crisis on his watch -- the discovery of
unauthorised trades allegedly made by Adoboli which lost the bank
$2.3 billion.
Born November 13, 1943 in eastern Germany, Gruebel had entered the
banking industry as an apprentice at Deutsche Bank.
His interim successor Ermotti had been appointed chairman and CEO
of UBS Group Europe, Middle East and Africa in April, according to
the UBS Investment Bank website.
- AFP/CNA/ls