UBS appoints ex-Credit Suisse head Gruebel new CEO
Stricken Swiss bank UBS named Oswald Gruebel, who masterminded a turnaround at arch rival Credit Suisse, as its new chief executive on Thursday, as under-fire Marcel Rohner resigned.
Rohner’s departure, after barely 18 months as CEO during which time UBS shares fell some 85 percent, placated angry investors, who welcomed Gruebel’s appointment as heralding a return to Swiss traditions of conservative private banking.
“Although Rohner was only appointed after the problems started and he can hardly be blamed, it was under his leadership that UBS had six consecutive loss-making quarters,” said Kepler Capital Markets analyst Dirk Becker.
“With Gruebel as the new CEO the bank can now restore confidence with investors, clients and regulators.”
UBS, which has made more writedowns during the credit crisis than any other European bank and reported the biggest loss in Swiss history in 2008, is now embroiled in a U.S. tax fraud case that experts fear could threaten the bank secrecy laws that underpin Switzerland’s wealth management industry.
The bank’s shares rose 10.1 percent to 11.12 Swiss francs by 1103 GMT (6:03 a.m. EST)while Credit Suisse rose 6.8 percent, versus a 4.8 percent rise in the European banking sector .SX7P. Swiss private bank Julius Baer was up a more modest 1.6 percent.
Gruebel, a 66-year-old German and a four-decade veteran of the banking industry who started his career at Deutsche Bank, immediately warned UBS staff to brace for more cuts.
UBS had announced another 2,000 investment banking job cuts this month to shrink its total workforce to around 75,000 by mid-2009 from a peak of about 85,000 fast payday loan no faxing.
It had said it was starting to turn the corner, with net inflows into both its wealth and asset management units in January, but news of the widening U.S. investigation pushed its shares down to new all-time lows this week, piling more pressure on top executives to step down.
Gruebel performed a rescue act at Credit Suisse, where as co-CEO and then CEO from 2003 to 2007 he reversed multi-billion-dollar losses and led a sweeping restructuring that restored profitability and confidence in the group.
‘FORMIDABLE CHALLENGE’
Gruebel said Switzerland needed more than one big bank after talk that UBS might be forced to merge with Credit Suisse, and said he would work hard to return the bank to profit. Rohner had pledged that UBS would be profitable again in 2009.
“The opportunity to lead UBS with its unique client franchise in wealth management, investment banking and asset management in these extraordinary times presents a fascinating, yet formidable challenge to me,” he said in a statement.
In an internal memo to staff, a copy of which was obtained by Reuters, Gruebel said “further substantial cost reductions” were inevitable given the tough business climate.
Analysts at Bank of America/Merrill Lynch noted that Gruebel was a vocal advocate of the integrated bank model during his time at Credit Suisse, repeatedly saying there were big synergies between investment banking and private banking.
Filed under: economics by Specialist