New UBS chairman subject to criticism

The new chairman of UBS has been criticised by Luqman Arnold, who runs the UK-based investment fund Olivant, and is the former chief executive of UBS.

The Swiss investment bank has been the biggest casualty of the credit squeeze so far and its new chairman, Peter Kurer, has been subject to heavy criticism by Mr Arnold who has purchased a 0.7% stake in the bank and is calling for the business to be broken up following its £19 billion of losses on sub-prime assets.

Mr Arnold said Mr Kurer has no banking, strategic, credit or market risk experience, all skills which are of critical importance given the situation in which UBS finds itself.

Mr Kurer claimed Mr Arnold was being discriminatory against lawyers and added I have not accepted this job on an interim basis. The company needs leadership and needs to know who is at the helm.

Olivant has named three potential candidates for the job, these are Josef Ackermann, 60, chief executive of Deutsche Bank, who has been responsible for the revival of the German bank.

Hans-Joerg Rudloff, 67, chairman of Barclays Capital and Markus Granziol, 56, a former senior colleague of Mr Arnold’s when he was chairman of UBS Warburg and now chairman of Eurex.

However, none of the above mentioned have been approached even on an informal basis, according to Olivant. Consequently, Mr Kurer, previously the bank’s chief lawyer, was appointed to replace former chairman, Marcus Ospel, as the head of UBS on the last possible day before the bank’s annual meeting on next week.

That gave no one else the chance to be nominated and the chairmanship cannot be changed for another 12 months.

Mr Ospel admitted full responsibility for the firm’s plight and stepped down.

Speculation is growing about the likelihood of significant job losses at UBS’ investment banking business. The banking giant said it is reviewing its operation in an effort to increase efficiency but would not be making any announcement until the start of next month.

Luqman Arnold is also the former chief executive of Abbey and Olivant was in the running for the bidding war of Northern Rock but pulled out before the proposal deadline.

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