Ospel to leave after new credit woes at UBS

Source: Exec Digital USA

Date :01/04/2008 05:25:04

Marcel Ospel(pictured) said Tuesday he will not seek re-election as chairman of UBS AG as the Swiss bank announced a fresh $19 billion writedown and its second capital increase in two months.

Peter Kurer, UBS’s general counsel, will succeed Mr. Ospel as chairman. He is best known in Switzerland for his role during the collapse of Swissair, the former national airline.

Headhunting

Mr. Ospel has faced mounting criticism over his and the board¹s failure to identify the bank¹s huge exposure and its subsequent handling of the crisis.

The Financial Times reported in February that UBS, Europe’s biggest casualty of the subprime crisis, had contacted some of Europe’s top bankers to join its board of directors and eventually replace Mr. Ospel.

The executives contacted by headhunters acting for the bank include Bob Diamond, president of Barclays; Michael Cohrs, head of global banking at Deutsche Bank; and John Studzinski, Blackstone‘s senior managing director, the FT said, citing people familiar with the matter.

Rights issue

“I have always stated that I ultimately take responsibility for the bank’s situation,” said Mr. Ospel in a statement. “We have worked very hard and have been able to address the firm’s most pressing problems.”

The decision came as UBS said it expected to lose a net SFr12 billion in the first quarter on the back of a further $19 billion writedown on its US holdings.

To maintain the high capital ratios considered essential for the group’s blue chip private banking business, it will also make a SFr15 billion rights issue, which will be fully underwritten by JP Morgan, Morgan Stanley, BNP Paribas and Goldman Sachs.

April 1, 2008