Bank on the run

12 August 2008 By Jeffrey Goldfarb Follow @jgfarb

The Swiss bank admitted defeat on its onebank strategy, paved the way to exit investment banking and further pared the balance sheet. But it was hurt by legal woes, credit losses and private bank withdrawals. UBS is running a good race. If only it could pull away from history.

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UBS, the Swiss bank, said it would separate its wealth management unit, investment bank and asset management arm into three autonomous divisions.

Our review has clearly revealed the weaknesses associated with the integrated ‘one firm' business model, said Peter Kurer, UBS's chairman.

UBS also reported a secondquarter net loss of SFr358m, its fourth consecutive quarterly loss. Credit risk valuations were reduced by $5.1bn. A provision of $900m was taken in relation to a US legal settlement over the sale of auctionrate securities.

The bank said it does not expect to see any improvement in the difficult economic and financial market conditions in the second half. UBS plans to continue cutting personnel levels, costs and risk concentrations.

UBS appointed John Cryan, head of the investment bank's financial instittuions group, to be chief financial officer, replacing Marco Suter. It also appointed Markus Diethelm to be group general counsel.

UBS nominated RainerMarc Frey, Bruno Gehrig, Sally Bott and William Parrett to become members of the board.

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