UBS Chief Gruebel Dismisses Calls to Quit After Unauthorized Trading Loss
Gruebel said he is responsible for everything that happens at the Zurich-based bank, according to an interview in Swiss newspaper Der Sonntag today. Serge Steiner, a UBS spokesman, confirmed the comment. Nikolaus Senn, former chairman of Union Bank of Switzerland, one of the banks that merged to form UBS, said two days ago Gruebel won’t be able to keep his job.
“If someone acts with criminal intent, you can’t do anything,” Gruebel said. “That will always exist in our job. If you ask me whether I feel guilty, then I say no.”
The bank said on Sept. 15 it may be unprofitable in the third quarter after the $2 billion loss at its securities unit. Kweku Adoboli, a UBS trader, was charged with fraud and false accounting by London police the next day. The incident dealt another blow to UBS’s attempts to boost profitability at its investment bank after record losses during the credit crisis.
“The trading loss may be the nail in the coffin for UBS investment-banking ambitions,” Dirk Hoffmann-Becking, a London- based analyst at Sanford C. Bernstein Ltd., said in a note. “Chances have materially increased that UBS will implement a material contraction of the investment banking franchise down to low risk, low capital-consuming businesses.”
UBS already announced 3,500 job cuts last month, with 45 percent coming from the investment bank, as stricter capital requirements and market turmoil hurt its earnings outlook. The bank in July scrapped a target to double pretax profit to 15 billion francs by 2014 and is due to update investors on its business plans in November.
A UBS trader made a series of unauthorized transactions in the past three months and falsified hedges for them, according to the bank’s spokesman Steiner.
UBS has set up a committee led byDavid Sidwell, a UBS board member and former Morgan Stanley chief financial officer, to pursue an internal investigation, according to Steiner.
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