UBS board names interim chief Ermotti as CEO
GENEVA — UBS AG said today that its board has appointed interim chief Sergio P. Ermotti as the new permanent CEO, ending uncertainty over the Swiss bank's leadership following a rogue trading scandal.
The announcement came ahead of an investors' meeting Thursday in New York, at which executives were expected to outline UBS's strategy for recovering from the $2.3 billion rogue trading loss.
"It was important not to allow a leadership vacuum to occur," board chairman Kaspar Villiger told a news conference. The former Swiss president said Ermotti, from the Italian-speaking south of Switzerland, was the unanimous choice of the board.
Villiger added that he himself would make way for his successor Axel Weber at the bank's shareholder meeting in May, one year earlier than planned.
Ermotti had been tipped to succeed Oswald Gruebel following the German's premature departure in September. Gruebel had been lauded for his two-year effort to clean up the bank's image after massive subprime mortgage losses and an embarrassing U.S. tax evasion investigation, but chose to take responsibility for the trading loss caused by a London-based trader. Kweku Adoboli, 31, was arrested Sept. 15 and has been charged with fraud and false accounting.
Ermotti spent 16 years rising up the ranks at Merrill Lynch before joining Italy's UniCredit in 2005, where he is said to have been instrumental in disposing of the bank's toxic assets during the banking crisis.
The 51-year-old announced several reforms to UBS's operations during his tenure as interim chief, including a restructuring of the investment division where the trading loss occurred.
"We will need significantly less capital for our new business model," Ermotti told reporters following his appointment. He said further details about the strategy would be revealed in New York, but insisted the bank's much-criticized pursuit of risky investments would be reined in.
"A bank has to take risks, but my job will be to make sure that risks stand in sensible balance to our profits," he said.
Analysts at Zuercher Kantonalbank predicted UBS would announce more modest goals than the 15-20 percent return on equity target set by Gruebel two years ago.
UBS shares were down 3.1 percent at 10.61 Swiss francs ($11.57) by noon on the Zurich exchange.