UBS bank comes under pressure
Apr 5 2008 by Peter McCusker, The Journal
BELEAGURED Swiss investment bank UBS came under pressure from investor and former chief executive Luqman Arnold to break itself up.
The head of investment firm Olivant, which failed in a rescue attempt for Northern Rock and has built a 0.7% stake in UBS, is seeking an overhaul of the bank’s board.
The move comes after UBS this week announced a first quarter 19 billion US dollar (£9.6bn) writedown for US real estate-related assets. The charge came on top of an 18.5 billion dollar charge the bank suffered from bad investments last year.
Mr Arnold, also a former chief executive of Abbey, has written to a senior director of UBS requesting a meeting ahead of the bank’s annual meeting on April 23.
He said: “While we welcome and support a number of decisions taken by the board, fundamental issues remain. We believe a substantial recapture for shareholder value will be achievable given the quality of UBS’s business franchises.”
Mr Arnold added there was a need for a “clearer and more focused corporate strategy and fundamental overhaul of risk discipline.”
The Financial Times said Mr Arnold proposed boosting UBS’s capital base by selling the bank’s asset management division and subsidiaries in Brazil and Australasia – moves he believes could raise 15 billion US dollars (£7.5bn).
Mr Arnold is also recommending an overhaul of its board of directors to dismantle the role of chairman.
