UBS needs 2-3 years for sustainable profit: report

(REUTERS)

Published Monday, March 02, 2009

By AFP

It could take two to three years to bring UBS, the world's largest wealth manager in terms of assets, back to making a sustainable profit, its new chief executive was quoted as saying.

Sunday's edition of Swiss newspaper NZZ am Sonntag quoted Oswald Gruebel as saying UBS would have to cut costs further, though he did not give specifics.

UBS is struggling to rebuild its once powerful brand after massive investments into risky US assets forced it to make more writedowns than any other European bank and to accept government backing.

When asked how long it would take to make UBS profitable again, Gruebel said: "If there were only factors which I could personally identify, I would say two to three years.

"But there is the market, which I cannot predict. Apart from that, there is for me of course a limit of about five years. Then no one wants to have an operational boss who is 70 years old or more," Gruebel said.

UBS is struggling to rebuild its once powerful brand after massive investments into risky US assets forced it to make more writedowns than any other European bank and to accept government backing.

UBS named Gruebel, who masterminded a turnaround at rival Credit Suisse, as CEO on Thursday, replacing under-fire Marcel Rohner as the bank seeks to end a run of crises, including a US tax probe that is threatening Switzerland's prized banking secrecy.

In an interview published on Friday, Gruebel said UBS was targeting a profit in 2009, but cautioned it was difficult to make forecasts in such volatile markets.

BONUS REPAYMENTS

NZZ am Sonntag also reported more top UBS managers had paid back bonuses, including former Chief Financial Officer Clive Standish and the former head of its investment bank, Hugh Jenkins.

A UBS spokeswoman confirmed that more bonuses had been returned, but declined to give further details.

Former UBS Chairman Marcel Ospel and other ex-board members have agreed to return payments from the bank after a Swiss media campaign against excessive pay.

UBS has also agreed to change its compensation practices when it received a Swiss government bailout last year and is slashing bonuses for its investment bank by more than 80 per cent.

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