Print

Mail

wiki links

UBS chairman’s office to become two committees

Restructuring plan • The UBS chairman’s office decides the bank’s overall strategy, sets salaries and bonuses, and screens nominations for executive positions. • Most of these functions will now be handled by a strategy committee and a risk committee. • The remaining functions will be taken over by other groups within the bank.

UBS AG chairman-designate Peter Kurer said on Saturday that he’ll replace the bank’s chairman’s office with separate strategy and risk committees that include seats for non-executive board members.

Kurer has the board’s support and has spoken with financial regulators about the possible change in the Zurich-based company’s decision-making structure, UBS spokesman Christoph Meier said in telephone interview, confirming Kurer’s comments published by the Neue Zuercher Zeitung newspaper on Saturday. UBS is Switzerland’s largest bank by assets.

The UBS chairman’s office, currently composed of retiring chairman Marcel Ospel and executive vice-chairman Stephan Haeringer, met 15 times last year to discuss the bank’s risk profile, decide overall strategy, set salaries and bonuses, and screen nominations for executive positions, the company’s Web site says.

Independent board members will sit with internal UBS board members in the two new committees, Kurer said.

Kurer, 58, said he’ll be on the strategy committee, without naming other committee members or saying which of the remaining chairman’s office functions will be assumed by other bodies.

Investors will vote on Kurer’s nomination as chairman at UBS’s shareholder meeting on April 23. Former UBS president Luqman Arnold, whose Olivant Advisers Ltd holds 0.7 percent of UBS stock, has called for a banking expert to be chairman, instead of Kurer, a lawyer.

Olivant has the support of about a dozen institutional shareholders in its campaign for changes to the Swiss bank’s corporate governance, the Financial Times reported on Saturday.

Olivant wrote an open letter to the bank 10 days ago criticizing the nomination of Kurer and asking for strategic changes. Olivant declined to identify the investors who are supporting the campaign, the newspaper said.

The Tages-Anzeiger newspaper, citing its own research, said on Saturday that rival Credit Suisse Group may write down about 4 billion Swiss francs (US$4 billion) in the first quarter and post a loss of between SF1 billion and SF2 billion.

The departures of David Blumer, the former chief executive of asset management, and global securities chief Michael Ryan “are a signal that Credit Suisse must undertake price corrections and that a further writedown of billions is imminent,” the Zurich-based newspaper said.

Credit Suisse said on March 20 it will write down a combined US$2.65 billion in the fourth quarter of last year and the first quarter of this year, making a profit this quarter “unlikely.”

The bank’s spokesman Andres Luther declined to comment on Tages-Anzeiger’s figures when contacted by telephone.

Blumer quit Credit Suisse on April 2 to join Swiss Reinsurance Co as head of financial services. At the bank he oversaw a SF247 million loss in the fourth quarter as the asset management unit purchased securities from Credit Suisse’s money market funds.

Ryan left the bank after less than a year as global securities chief. A memo sent to Credit Suisse employees announcing his departure on April 10 didn’t give reasons.

Rival UBS reported a SF12 billion loss in the first quarter, after making writedowns of US$19 billion on debt securities in the first three months of the year, bringing the total to almost US$38 billion since the third quarter of last year.

Credit Suisse, which is due to announce first-quarter results on April 24, warned last month about a possible loss for the period as mispricing of debt securities would lead to writedowns.
This story has been viewed 868 times.