Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

UBS Chief Gruebel Dismisses Calls to Resign After Trading Loss

UBS AG Chief Executive Officer Oswald Gruebel. Photographer: Gianluca Colla/Bloomberg
UBS AG Chief Executive Officer Oswald Gruebel. Photographer: Gianluca Colla/Bloomberg

Sept. 18 (Bloomberg) -- UBS AG Chief Executive Officer Oswald Gruebel said he doesn’t plan to resign after Switzerland’s biggest bank last week reported a $2 billion loss from unauthorized trading.

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.

David Sidwell

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 by David Sidwell, a UBS board member and former Morgan Stanley chief financial officer, to pursue an internal investigation, according to Steiner.

To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net

To contact the editor responsible for this story: Dick Schumacher at dschumacher@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.