 "New UBS chief awaits markets' verdict")
Zurich: Markets will give their verdict on Monday on whether they think Swiss bank UBS’s new caretaker chief executive has the mettle to manage the overhaul of its investment bank after Oswald Gruebel quit over the $2.3 billion rogue trading scandal.
The 67-year-old German resigned on Saturday, with the UBS board appointing as his interim replacement Sergio Ermotti, who hails from Switzerland’s Italian-speaking region of Ticino.[caption id=“attachment_92119” align=“alignleft” width=“380” caption=“Former CEO of Swiss bank UBS, Oswald Gruebel. Keystone, Georgios Kefalas/AP”]  [/caption]
Ermotti, who joined UBS in April after having been passed over for the top job at Italian bank UniCredit, has been regarded as a likely candidate for further promotion since he joined UBS in April as head of Europe, Middle East and Africa.
A former Merrill Lynch head of global equity markets, the 51-year-old has experience both in investment banking and wealth management.
“Good news; obvious candidate” said Helvea analyst Peter Thorne.
The UBS board is looking at other candidates both inside and outside the bank to become the permanent new chief executive but Chairman Kaspar Villiger said at the weekend that Ermotti was a strong candidate.
Shares in UBS fell more than 10 percent after the scandal broke on 15 September, trading at their lowest level since shortly after Gruebel took over in early 2009. However, they rose nearly 5 percent on Friday on hopes the board would decide on a major overhaul of the investment banking business.
At the top of Ermotti’s to-do list for UBS is accelerating the overhaul, along with reviewing risk controls and overseeing an investigation into the huge trading loss.
Villiger said at the weekend he expects the revamp to take two to three years to complete and that he intends to remain chairman until 2013, when he is due to hand over the reins to ex-Bundesbank head Axel Weber.
Weber has already been serving as an informal advisor to the board while it searches for a new CEO and was in Singapore last week where UBS was holding a regular board meeting ahead of the UBS-sponsored Singapore Formula One motor racing Grand Prix.
But Villiger said the bank was sticking to plans for Weber to join the board next year and to take over as chairman in 2013.
“It’s not optimal for the president and the chief executive to step down at the same time. This way Axel Weber has the chance to get up to speed, Villiger told newspaper the NZZ am Sonntag.
Reuters
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