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UBS Losses Claim First Senior Victim

The fallout from the reported $2.3 billion losses run up by a trader on UBS’s Delta One desk has claimed the scalp of CEO Oswald Grübel. The UBS board of directors on Friday accepted the decision of Grübel to resign from the bank.

The bank has asked Sergio Ermotti to take up the position of group CEO on an interim basis. The appointment will take effect immediately.

“The board regrets Oswald Grübel’s decision,” says UBS chairman Kaspar Villiger. “Oswald Grübel feels that it is his duty to assume responsibility for the recent unauthorised trading incident. It is testimony to his uncompromising principles and integrity. During his tenure, he achieved an impressive turnaround and strengthened UBS fundamentally. He steps down having helped make UBS one of the world’s best capitalised banks. On behalf of the board of directors, I extend my heartfelt gratitude to him for everything he has done for UBS.

“I would like to thank Sergio Ermotti for taking over the interim leadership of UBS,” Villiger adds. “With his extensive industry experience and together with the executive leadership team he will continue to implement UBS’s strategic alignment.”

The board of directors will continue the ongoing internal and external evaluation process to find a permanent successor as group CEO, the bank says, adding that it is, “deeply disappointed by the recent loss arising from unauthorised trading”.

UBS says the board will fully support the independent investigation and will ensure that mitigating measures are implemented to prevent such an incident from recurring.

Part of the fallout also saw a reduction in the capital allocated to UBS’s investment banking business and a lower risk profile for the unit. The bank’s board says it has asked the group executive board to “accelerate the implementation of the Investment bank’s client-centric strategy, concentrating on advisory, capital markets, and client flow and solutions businesses. This strategy is consistent with the industry’s changing capital requirements and will lead to a reduction in complexity. It will also help to ensure that UBS delivers the best-quality risk-adjusted returns for shareholders.”

Villiger adds: “We are committed to further expanding our wealth management franchise. The investment bank will continue to strengthen its alignment with UBS’s wealth management businesses, in addition to serving its corporate, sovereign and other institutional clients. In the future, the investment bank will be less complex, carry less risk and use less capital to produce reliable returns and contribute more optimally to UBS’s overall objectives.”

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