UBS AG (UBSN), the Swiss lender that says it sustained a $2 billion loss from unauthorized trading at its investment bank, told clients it “remains strong” and will scrutinize how it monitors risks.
While the loss “is disappointing, UBS remains strong, well-capitalized and committed to serving you,” executives at UBS Financial Services wrote yesterday in an e-mail to customers. Karina Byrne, a spokeswoman for the Zurich-based firm, confirmed a copy of the message obtained by Bloomberg News.
Kweku Adoboli, 31, a trader on the Delta One desk at UBS’s investment bank, was charged in the U.K. today with fraud and false accounting. UBS Chief Executive Officer Oswald Gruebel called the loss “unauthorized” and “distressing” in an e- mail to employees yesterday, without giving details.
“UBS is taking this incident very seriously,” the firm said in the e-mail to customers. “In addition to cooperating with the authorities, UBS will thoroughly review its risk management and control processes.”
from bloomberg
=============================================================
2 billion?
pity the shareholders.
GIC is one of the shareholders right?
SINGAPORE: The Government of Singapore Investment Corporation (GIC) has defended its investment in Swiss bank UBS.
This was in response to a forum letter in TODAY newspaper, which called for GIC to be more transparent with its losses.
The letter came after a US$2.3 billion loss was made by a rogue trader at UBS.
GIC is the largest shareholder of UBS with a stake of more than six per cent.
In a letter to the media, GIC said its investment in UBS was made before the onset of the global financial crisis of 2008.
It reiterated that in retrospect, the timing for the investment could have been better.
GIC also pointed out that during the same period, it had made good investment decisions and these have offset the losses on UBS.
GIC said its total portfolio has fully recovered to its value prior to the global financial crisis.
The firm added that it does not disclose strategies or details of specific investments to preserve its competitive edge.
It
reiterated that its investment objective, as set out by the government,
is to achieve good long-term returns over a 20-year investment horizon.
GIC said its performance is assessed based on "our overall portfolio and not on individual investments".
As of 31 March 2011, the firm's 20-year annualised real rate of return, in excess of global inflation, was 3.9 per cent.
GIC also pointed out that more information is available in its annual report, which is posted on its website.
It had bought into the bank's ordinary shares at a conversion price of 47.7 Swiss francs or $67.60 per share.
The shares closed at around 20 per cent of that value the day the loss was announced.
This
means that since its original investment of around 11 billion Swiss
francs in 2008, it made an estimated paper loss of about six to seven
billion Swiss francs at today's price.
-CNA/wk
the way they put it anyone can be an investor.
just say i can wait 20yrs.
its only paper loss.
GENEVA - Swiss
banking giant UBS announced Saturday the resignation of chief executive
Oswald Gruebel, less than two weeks after the bank was rocked by a rogue
trading scandal that lost it $2.3 billion.
Switzerland's largest bank said in a statement that its board of directors had accepted Gruebel's resignation.
Sergio
Ermotti has been named as interim CEO effective immediately, the
statement said, nine days after the arrest of Kweku Adoboli, a UBS
trader accused of a 1.7 billion euro fraud.
UBS Chairman Kaspar
Villiger said in the statement that while the board "regrets" his
resignation Gruebel "feels that it is his duty to assume responsibility
for the recent unauthorised trading incident."
Villiger praised
Gruebel for "his uncompromising principles and integrity", and
acknowledged that during his tenure "he achieved an impressive
turnaround and strengthened UBS fundamentally."
The board also
said it would "fully support" the independent investigation into the
rogue trading and would ensure that "mitigating measures" were
implemented to prevent such incidents from recurring.
Swiss media
speculation had been mounting that Gruebel would be ousted at the
long-scheduled UBS board meeting held in Singapore in the run-up to
Sunday's Grand Prix -- the bank is a major sponsor of Formula One
racing.
Reports said Gruebel was expected to seek a vote of
confidence during the meeting, with the bank under pressure from
shareholders and some Swiss politicians over the rogue-trading scandal.
But
Villiger, shortly after the statement was released, told journalists
the UBS board did not want Gruebel to step down immediately, and would
have preferred he stayed on until a key shareholders' meeting, set for
the spring of next year.
But for Grubel, staying on until next
year would not have sent a strong enough signal regarding his
responsibility for the scandal, and so he chose to resign now, Villiger
explained by phone from Singapore.
When contacted by the media, a
spokesperson from the Government of Singapore Investment Corporation
(GIC) declined comment on news of Gruebel's resignation.
The GIC is UBS' largest shareholder.
Earlier this week, it urged board members to act to restore faith in UBS.
It had also issued a rare public rebuke to the bank, saying it has asked UBS for details on how it planned to tighten controls.
UBS
had turned to Gruebel, a former Credit Suisse boss, to stem its record
losses amid the global financial crisis and seek a way out of its bitter
tax evasion spat with the United States.
Gruebel, 67, had
engineered Credit Suisse's own recovery in the early 2000s, after the
bank took massive charges arising from the Enron scandal. Within a year,
the bank returned to profitability.
Likewise at UBS, Gruebel managed to restore the bank's profitability around 18 months after he took over the helm.
Within
minutes of taking the reins at UBS, he told his staff that massive cost
cuts were imminent and since 2009, proceeded to slash thousands of
jobs, trimming a bank that was getting too large to govern.
Investors
heaved a sigh of relief when the bank not only became profitable again
in the third quarter of 2010, but also stemmed an outflow of client
assets for the first time since the financial crisis.
However,
Gruebel has now been forced to resign after UBS was hit with an internal
crisis on his watch -- the discovery of unauthorised trades allegedly
made by Adoboli which lost the bank $2.3 billion.
Born November 13, 1943 in eastern Germany, Gruebel had entered the banking industry as an apprentice at Deutsche Bank.
His
interim successor Ermotti had been appointed chairman and CEO of UBS
Group Europe, Middle East and Africa in April, according to the UBS
Investment Bank website.
- AFP/CNA/ls
our ministers' salaries are pegged to the private sector.
isnt it fair they assume responsibility and quit like the private sector's CEOs do whenever they make 'irreparable' mistakes?
Originally posted by dragg:GIC is one of the shareholders right?
GIC also have a huge paper lost. They no choice but to hold on.
Anyway, UBS is a strong bank, wont collapse due to this.