Former UBS chairman calls for break-up of troubled bank

04-04-2008

Former UBS chairman calls for break-up of troubled bank
A former chairman of UBS has called for Switzerland's largest bank to overhaul its operations to alleviate its writedown woes.

Luqman Arnold, the founder of UK-based private equity firm Olivant, wants UBS to separate its investment arm from its private bank.

In a six-page letter to UBS vice-chairman Sergio Marchionne he said a break-up of the bank was necessary after it posted sub-prime writedowns of $37 billion (£18.5 billion).

Mr Arnold strongly criticised executive board chairman Peter Kurer in his letter, citing his lack of "proven strategic, risk management and communications skills".

"UBS' reputation has been comprehensively destroyed by proprietary trading activities totally divorced from any client business," he continued.

The correspondence comes as Olivant, which launched a failed bid for Northern Rock, acquired 0.7 per cent of UBS.

UBS has already revealed plans to raise 15 billion Swiss francs (£7.5 billion) through the issue of new shares after revealing additional writedowns of $19 billion (£9.5 billion).

Marcel Ospel, the current chairman and former chief executive, has also announced he is to stand down.

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