ZURICH - Stricken Swiss bank UBS appointed Oswald Gruebel, who masterminded a turnaround at arch rival Credit Suisse, as its new chief executive, replacing Marcel Rohner.
UBS has made more writedowns than any other European bank during the credit crisis and is embroiled in a tax row with US authorities, pushing its shares to all-time lows and putting a senior management team last reshuffled less than a year ago under severe pressure.
"With his previous employer Credit Suisse, Mr. Gruebel was the architect of a successful turnaround and restored confidence in the company in turbulent times," UBS said in a statement.
A four-decade veteran of the banking industry, Gruebel performed a rescue act at Credit Suisse, where as co-CEO and then CEO he reversed multi-billion-dollar losses and led a sweeping restructuring that restored profitability and confidence in the group.
UBS shares had risen some 11 percent to 11.17 Swiss francs by 0825 GMT, versus a 3.7 percent rise in the European banking sector, as investors welcomed news Rohner was leaving the bank, signalling a potential departure from its previous strategy.
"UBS shares are likely to rise today, but this will be more because Rohner is going rather than because it's Gruebel who is replacing him. The news that Gruebel is moving to UBS is bad for Credit Suisse as he is likely to take some good people with him," one Zurich-based trader said.
"If Kurer would go to, then the (UBS) shares would rise further."
In an internal memo to UBS staff, Gruebel said his appointment may have come as a surprise to many.
"It is a clear signal of the board's willingness to take action and move ahead," Gruebel wrote in the note, a copy of which was obtained by Reuters. "Given the current business climate in many of our markets, further substantial cost reductions will be inevitable."
UBS said on Thursday Rohner had informed the board in January of his intention to retire after the repositioning of UBS' investment bank had been concluded.
"Oswald Gruebel brings the ideal skill set to recreate value, together with our management team, for our shareholders and clients," UBS Chairman Peter Kurer said in a statement.
Shares in UBS have fallen below 10 Swiss francs this week after a barrage of criticism of its and Switzerland's handling of the US tax fraud probe.
UBS agreed last week to pay a $780 million fine and hand over some client names to settle US criminal charges in the investigation, prompting a slide in shares and concerns it will weaken the strict privacy rules that underpin Switzerland's wealth management industry.
Gruebel was at Credit Suisse for almost 40 years and held various management positions at group level and in investment banking and private banking units. He was co-CEO and CEO from 2003 until 2007.
Swiss newspapers had attacked UBS Chairman Kurer and CEO Rohner for the bank's performance, stoking speculation the bank might undergo a new management reshuffle less than a year after its previous change at the top.
Markets and the media have mentioned several potential candidates for senior positions at UBS, including Swiss National Bank board member Philipp Hildebrand, Deutsche Bank CEO Josef Ackermann and Fiat chief Sergio Marchionne.