Management Turnover as Change Agent

Thursday, January 31, 2008

Chairman Watch - Marcel Ospel, UBS

As the financial news for UBS AG UBS (NYSE) continues to look dim, I have finally decided to add Marcel Ospel, the imperious Chairman of UBS to my watch list. Ospel has always had the bank's board in his back pocket but how much can the bank take before some action at the top is taken. UBS has been ensnared in the U.S. sub-prime crisis for sometime now and their continues to be negative press about other parts of the bank. Just today, more bad news has come to light. In the UK Times Online, Tom Bawden wrote,
UBS has significantly increased its estimate of huge fourth-quarter losses from the American sub-prime mortgage crisis, further increasing the pressure on Marcel Ospel, its chairman.

The Swiss bank said yesterday that its quarterly losses from the sub-prime crash would be $14 billion (£7 billion), $4 billion more than the figure given a month earlier. Although UBS's total $18.4 billion of sub-prime losses so far are not as large as those of Citigroup or Merrill Lynch, they are the biggest among any of the European banks.

... To make matters worse, UBS revealed that it still owned about $29 billion of bonds and other investments backed by sub-prime mortgages, leaving scope for further writedowns in addition to the $18.4 billion that it has lost so far.
The banks needs to step up to the plate and make some changes at the top. I see very little opportunity for Ospel to weather this continuing and growing storm. Keep a close eye on the bank.

For more:

Financial Director
Business Week

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