November 20, 2011 / 11:24 AM / in 6 years

Ermotti says UBS strategy has Weber's full backing: report

ZURICH (Reuters) - Swiss bank UBS’s UBSN.VX strategy to slash risky assets by almost half and pay its first dividend since the financial crisis has the full backing of Axel Weber, its newly-crowned Chief Executive Sergio Ermotti said in a Swiss newspaper on Sunday.

“Axel Weber is 100 percent behind our strategy,” Ermotti, who was named permanent CEO last week, told the NZZ am Sonntag newspaper in an interview.

Ermotti took over as interim CEO after Oswald Gruebel quit in September over the bank’s $2.3 billion rogue trading scandal.

The relationship between Ermotti and Weber, who will be proposed chairman at the annual general meeting in May next year, will be closely scrutinized, as sources have said Weber was not entirely sold on Ermotti as CEO and instigated a search for outside candidates.

Although Weber did not formally take part in the discussions about the dividend payment, all topics that are made public are discussed with him, Ermotti said.

“There is no conflict: we will keep building up capital even with a dividend payout,” he said.

Ermotti also said the bank was carefully examining its risk controls following its rogue trading scandal but there was no such thing as a “risk-free bank.” [ID:nS1E78I1PI]

“With 65,000 employees we’re going to have such cases now and again. We have to, however, have these risks so under control that the consequences, financially and for our reputation, remain within acceptable limits,” he said.

In a separate interview with the SonntagsZeitung newspaper, outgoing Chairman Kaspar Villiger said the bank would focus on building up its capital base but would consider share buy-backs.

“A share buy-back is possible if our capital base and profitability allow it,” he told the paper.

UBS announced a further 400-500 job cuts on Thursday on top of 3,500 staff it said in August would be cut. Villiger said no further cutbacks were planned for the time being, but it depended on developments in the markets.

“The cost pressure is very strong in general. If the markets deteriorate, we can’t rule out that further cost-saving measures will be necessary.”

Reporting by Caroline Copley; Editing by Elaine Hardcastle

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