UBS chairman steps down after losses

Swiss banking giant UBS announced new losses of about 19 billion dollars on Monday. The bank also announced that Chairman Marcel Ospel would not stand for re-election later this month.


ZURICH, April 1 (Reuters) - UBS AG doubled its writedowns
from the subprime crisis, parted company with its chairman and
asked shareholders for more emergency capital on Tuesday in a
second dramatic attempt to reverse its fortunes.

The Swiss bank wrote down an additional $19 billion on U.S.
real estate and related assets, causing a net loss of 12 billion
Swiss francs ($12.03 billion) in the first quarter, and said it
would seek 15 billion francs through a rights issue of shares.

It is also hiving off ailing portions of the bank into a
separate unit.

The moves were more dramatic than expected by many and deal
a new blow to the world's largest wealth manager and the
European bank hardest hit so far by the credit crisis, still
reeling under the weight of billions of dollars in bad

Shares were expected to fall sharply on the news.

"The question remains whether finally all the skeletons have
been cleared from the closet through today's writedowns or
whether there will be further problems. There is still room for
more correction given the exposure," said analysts at bank
Wegelin in a note to clients.

The crisis claimed the head of the bank's chairman, Marcel
Ospel, widely criticised for letting Switzerland's flagship bank
sail blithely into dangerous waters in an ambitious bid to
become the world's biggest investment bank.

Ospel said he decided to leave the job after the bank was
forced to go to shareholders for a second time in as many months
for emergency capital. The group's general counsel, Peter Kurer,
was proposed as his replacement.

More job cuts in the group's investment bank -- source of
the losses, in sharp contrast the group's wealth management
division -- were on the way, UBS Chief Executive Marcel Rohner
said in a conference call with journalists.

"Clearly the industry is in a very difficult environment and
we have to review the capacity with which we operate in this
environment," he said.


UBS said it would create a new division to deal with the
ailing assets after its mortgage-related positions deteriorated
further in the quarter, in a clear move to draw a line under the
crisis which has shaken investor confidence in the Swiss bank.

While the group was able to reduce some of its exposure to
ailing debt, other potential risks increased and its overall
position in U.S. mortgages had deteriorated further, UBS said.

"The new capital hike and the monstrous losses are negative.
The choice of Peter Kurer is not so clear either. He's
well-known in legal circles but his skills as a banker have yet
to be proven," said one Zurich trader.

The writedowns come at the upper end of expectations and on
top of $18.4 billion in damage caused by the subprime crisis
last year, which had already forced the bank to ask shareholder
approval for 19 billion francs in capital-raising measures in

The creation of a so-called workout unit, sometimes called a
"bad bank", would allow UBS to sequester the credit problems in
a separate division, permitting management to focus on the
group's profitable operations and investors to assign value to

The bank needs a sound capital base to underpin its
wealth-management business for rich clients, who have less
tolerance to losing money than institutional investors and are
easily irked by negative headlines. The rights issue is fully

Ospel said, "I have always stated that I ultimately take
responsibility for the bank's situation," adding "we have been
able to address the firm's most pressing problems."

Analysts had expected the bank to write down an additional
10-20 billion francs in 2008.

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