Tough Chores Await the New UBS Chief

Sergio P. Ermotti, the new interim chief executive officer of UBS, faces “difficult times,” in the words of Chairman Kaspar Villiger, who announced his appointment. Some analysts take a starker view of Switzerland’s largest lender. “This is a bank now in disarray,” says Chris Wheeler, an analyst at Mediobanca Securities in London. “They’ve let the CEO walk away. They’ve left themselves in a vacuum.”

Ermotti, 51, was named to the job on Sept. 24 and is a candidate to win the post permanently. He replaced Oswald Grübel, who resigned after UBS announced it had suffered a $2.3 billion loss from “unauthorized trading.” Kweku Adoboli, 31, the UBS trader charged with the fraud and false accounting that may have resulted in the loss, remains in custody and has yet to enter a plea. UBS had hired Grübel, 67, out of retirement in February 2009 to stabilize the lender after the bank’s bets on U.S. mortgage-backed securities backfired. In 2008 the bank posted the biggest loss in Swiss corporate history and took a capital injection of 6 billion Swiss francs ($6.7 billion) from the government.