UBS head resigns as first-quarter writedowns hit £9.6bn

by Gill Montia

Story link: UBS head resigns as first-quarter writedowns hit £9.6bn

The chairman of Swiss investment bank, UBS, resigned today as the bank reported that it had written down a further £9.6 billion in loses related to the US sub-prime mortgage crisis.

Marcel Ospel, who will be replaced by Peter Kurer, the bank’s inhouse general counsel, said: “I have always stated that I ultimately take responsibility for the bank’s situation.”

UBS posted an estimated first-quarter net loss of SwFr12 billion and job losses are expected at its London investment banking division.

In summing up the situation with regard to staff, UBS chief executive, Marcel Rohner stated: “Clearly the industry is in a very difficult environment and we have to review the capacity with which we operate in this environment … we will expect to be more specific with respect to all these measures in due course over the next weeks to come.”

The bank is planning a rights issue to shore up its balance sheet and will also reduce future exposure by ring-fencing some of its mortgage-related assets.

Mr Rohner, who was took over as chief executive last July after the ousting of Peter Wuffli, said: “I believe this capital increase and the creation of a separate vehicle to separate problem assets from the remainder of the business will allow us to return to sustainable value creation over time.”