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No let-up in pressure on Grübel as UBS board meeting takes weekend off

Bank admits loss of .3bn in Adoboli’s alleged rogue trading

A crucial meeting of the board of embattled Swiss bank UBS is to resume in the coming days after pausing on Friday (23 September) after nine hours of discussion dominated by the .3bn alleged rogue trading incident.

The Swiss bank’s chief executive, Oswald Grübel, who is under fire over alleged “unauthorised trading” by Kweku Adoboli in London, left the meeting at the bank’s Singapore office without commenting on his future.

The 67-year-old German, brought out of retirement to try to salvage UBS in 2009, refused to comment to reporters as he left the lengthy meeting which had been scheduled to finish on the Friday. An AFP reporter on the scene said he made no response when asked, “Were you fired?” and, “Did you lose your job?”

The bank has admitted that it faces losing .3bn – an early estimate put it at bn – and will plunge to a third-quarter loss as a result of the unauthorised trading activities, which the Financial Services Authority and Swiss regulator Finma are now investigating.

Accountants from KPMG – not Deloitte as originally thought – have now been appointed to run the investigation, which will be paid for UBS.

The bank confirmed that the board meeting had not finished. “The meeting has not ended,” a spokesman said. “The board has only finished for today.”

The bank had already promised to present an overhaul of its business to investors in New York on 17 November, but the discovery of the trading loss has piled pressure on Grübel to accelerate the review. He was expected to advocate some scaling-back of the investment banking division even before the losses but is resisting calls from some Swiss politicians to break up the bank to safeguard its private banking division.

Jobs in London, where the bank employs 6,000, are expected to be under threat as the loss almost wipes out the planned .5bn of cost savings that the bank hoped to make after announcing 3,500 job cuts across the group in August.

Adoboli, who has been charged with two counts of fraud and two counts of false accounting, remains in custody after being arrested in the early hours of Thursday morning a week ago. The 31-year-old British-educated Ghanian has yet to enter a ple

a to the charges, some of which date back to 2008. He will appear in court next month for a committal hearing.

UBS’s largest shareholder, Singapore sovereign wealth fund GIC, made a rare public intervention this week to call on the management to “take firm action to restore confidence in the bank”.

Comparisons are being made with the French bank Société Générale, which endured a rogue trading incident three years ago – at the hands of Jérôme Kerviel – and ultimately cost its chief executive, Daniel Bouton, his job a year later.

Grübel has made it clear that he has no intention of resigning, and there is a concern that even if he did step aside the bank has no obvious successor. Others may be forced to resign ahead of him in what is eventually expected to be a sweeping change to the management team.

The board meeting is taking place in Singapore to coincide with the country’s Grand Prix on Sunday: the Swiss bank is a major sponsor of the event and a well- known banking name in Asia. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds