SINGAPORE (Reuters) - UBS UBSN.VX chief executive Oswald Gruebel said on Wednesday he still has support from the Swiss bank’s board of directors, after unauthorized trading caused a $2.3 billion loss.
Arriving in Singapore for meetings with the bank’s management and board, he laughed when asked by reporters at his hotel if he still had the board’s backing and said, “Yes... always,.”
Gruebel is expected to ask the Swiss bank’s board to back plans for a radical overhaul of investment banking under his leadership at a meeting in Singapore.
The bank’s executive board was due to meet on Wednesday at their main offices in the city’s business district before its wider set of board members meet later in the week. This is one of the four regular meetings it holds every year and strategic changes to the investment bank are on the agenda, said several sources with direct knowledge of the plans.
Alexander Wilmot-Sitwell, the bank’s Asia-Pacific co-chairman and co-chief, told reporters outside UBS’s office that this was a normal regular meeting. The trading loss is a heavy blow to the reputation of Switzerland’s biggest bank, which had just started to recover after its near collapse during the financial crisis and a damaging U.S. investigation into its aiding wealthy Americans to dodge taxes.
UBS is already under pressure to scale down, ring-fence or even split off its risky investment banking business from its core wealth management unit in order to shield private clients.
But a source at the bank told Reuters that the board will not be rushed into dumping the investment bank following the rogue trades.
The bank’s biggest shareholder, Singapore-based sovereign wealth fund GIC, said on Tuesday it had discussed the alleged fraud with UBS management, adding it was disappointed by the case and urged UBS to take “firm” action to restore confidence.
GIC, which has a 6.4 percent stake in UBS and has lost about 77 percent of its 11 billion Swiss franc investment in the bank, said it had sought details on how UBS was tightening controls.
Gruebel said on Sunday he would “bear the consequences” of the trading loss that was discovered last week but did not want to quit, adding the affair would influence the future strategy of the investment bank.
The bank’s meeting in Singapore coincides with the city state hosting the Formula One Grand Prix, of which UBS is a major sponsor.
Additional reporting by Saeed Azhar and Simon Webb; Writing by Rachel Armstrong and Charmian Kok; Editing by Kim Coghill