- Oswald Grübel is to make a "back me or sack me" pitch to UBS board
- UBS directors have gathered in Singapore for meetings
- Comes after UBS trader arrested with fraud in London
Oswald Grübel is to make a "back me or sack me" pitch to the board of UBS as the bank's chief executive steels his determination to stay in his job in the wake of a $2.3bn rogue trading scandal.
"Ossie needs full support," one ally said on Wednesday after a day-long executive board meeting in Singapore.
UBS directors have gathered in Singapore -- where the Swiss group is sponsoring this weekend's Formula One Grand Prix -- for meetings, which will culminate on Friday with a full board meeting.
Speculation about Mr Grübel's future has escalated in Switzerland, where politicians have seized on the trading losses as further proof that UBS must be reined in. Carsten Kengeter, the head of the group's embattled investment bank, also has come under pressure as analysts suggest that a leading executive will have to be held accountable for the scandal.
Mr Grübel, who was brought out of retirement in 2009 to salvage UBS's business and its reputation after the bank lost $50bn during the crisis, batted away rumours about his imminent resignation. When asked if he still had the backing of fellow board members, Mr Grübel, 67, told reporters: "Yes, always."
Bankers close to Mr Grübel said he was determined to remain in his job at least until internal and external probes of the trading losses were completed, despite a belief that some board members might seek quick retribution for the control failings behind the trading losses. Kaspar Villiger, UBS chairman, also sought to play down speculation about immediate changes, telling reporters it would be a "normal" board meeting and the bank was not under pressure from investors.
A key difficulty for the Swiss group is that there is no consensus as to who would succeed Mr Grübel. While Sergio Ermotti, head of UBS's European businesses, has been tipped as a contender, the group might consider members of the bank's board, including Axel Lehmann, chief risk officer of Zurich Financial, people familiar with the situation said.
People at Wednesday's executive board meeting said it had been relatively upbeat, with a focus on "business planning", in particular how the investment bank should be shaken up. A long-planned reinvention of the unit is set to be accelerated, with a winding down of much of the bank's fixed-income operations.
Board committee meetings will follow on Thursday, including a session of the audit committee, which is at the centre of allegations that the bank failed to keep a proper track of trading within its "Delta One" business, where the losses occurred.
Bankers said although the alleged rogue trading occurred within the bank's previously well thought-of equities division, the meeting was told that there was no fundamental problem with that operation. "It's an operational risk issue -- the proper processes were not in place," said one participant in the meeting. "It's not a business problem."
On Tuesday, Mr Grübel gave a rousing "town hall" address to Singaporean staff at the bank's local headquarters, according to bankers who were there. He spoke damningly about the events of last week, dismissing talk of "unauthorised trading" and insisting this was "fraudulent position-taking".
Later, GIC, the Singaporean wealth fund and the bank's biggest investor, issued a rare statement that was highly critical of the "lapses" in UBS's controls and expressed its "disappointment" and "concern". More than half of the SFr11bn ($12.3bn) GIC invested in UBS in 2008 has since been wiped out.
Kweku Adoboli, 31, the trader charged with fraud and false accounting in connection with the losses, is expected to make a brief court appearance in London on Thursday.