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SWITZERLAND: UBS Names Grübel as New CEO

by Carrick MollenkampWall Street Journal
February 26th, 2009

UBS AG, the Swiss bank battered by massive write-downs and its role in a U.S. tax-evasion scheme, announced the latest shake-up in its top executive ranks with the surprise departure of chief executive Marcel Rohner.

Mr. Rohner is being replaced by 65-year-old Oswald Grübel, who had been CEO at Swiss rival Credit Suisse Group until he retired in 2007.

[Oswald Gr[uuml  ]bel]

In a statement, UBS said Mr. Rohner told UBS's board in January that he planned to retire as CEO after the conclusion of the "ongoing investment bank repositioning and wealth management restructuring phase."

But Mr. Rohner's departure comes just a short time -- less than two years -- after he was named CEO. In July 2007, Mr. Rohner replaced Peter Wuffli just as the bank was coming to grips with massive write-downs tied to bad bets on securities underpinned by subprime mortgage loans.

At the time of the announcement, UBS said Mr. Rohner "is well prepared for his new role" and the bank gave no indication that he would be CEO for a short period of time.

Mr. Rohner was replaced as head of the wealth management by Raoul Weil. Mr. Weil subsequently was indicted for his alleged role in helping U.S. clients of UBS evade taxes. A lawyer for Mr. Weil has denied the charge.

Mr. Rohner's sudden departure comes after UBS agreed earlier this month to a $780 million settlement with the U.S. Justice Department of a criminal inquiry into the bank's role in the tax evasion. A civil inquiry is ongoing and the U.S. Internal Revenue Service has sued UBS to turn over the identities of 52,000 Americans with Swiss accounts at UBS.

[UBS signage] Getty Images

UBS has announced the surprise departure of chief executive Marcel Rohner.

It's also a surprise that UBS was forced to turn to the ranks of a rival to fill a top leadership spot. Mr. Grübel spent four decades at Credit Suisse and served as co-CEO and CEO from 2003 until his retirement in 2007. He got his start in banking and securities in the 1960's at Deutsche Bank AG.

Mr. Rohner along with Chairman Peter Kurer had been the team assigned the task of trying to stabilize UBS after a series of losses and embarrassments. Earlier this month, the bank reported a net loss of 8.1 billion Swiss francs ($6.92 billion) adding to a 2008 loss of 19.7 billion francs.

Mr. Kurer, UBS's former in-house legal counsel, took over as chairman in 2008. He replaced Marcel Ospel.

In a statement, Mr. Grübel, the new CEO said, "I will do all I can to bring UBS back on a profitable, successful track."

Morale inside the bank has suffered, especially at UBS's investment bank where cash bonuses have been cut as part of a larger plan to reduce bonuses from about 10 billion Swiss francs in 2007 to about two billion francs in 2008.

Those bonuses were cut amid pressure from the Swiss government which has had to bail out UBS by helping the bank move $60 billion in assets to a Swiss fund.

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