UBS board meets in Singapore amid trading scandal
Swiss banking giant UBS began a meeting of its board in Singapore on Wednesday as it faces increasing pressure from shareholders after being hit by a $2.3 billion rogue-trading scandal.
UBS chief executive Oswald Gruebel declined to take questions before going into the bank’s Singapore office for the meeting, which is expected to last for three days, Dow Jones Newswires reported.
The Singapore meeting had long been scheduled and was being held in the run-up to the Singapore Grand Prix. UBS is a major sponsor of Formula One racing.
On the eve of the meeting the Government of Singapore Investment Corp (GIC), UBS’ biggest shareholder, issued a rare public rebuke of the bank for lapses that led to the losses.
“GIC expressed disappointment and concern at the lapses and urged UBS to take firm action to restore confidence in the bank,” the cash-rich sovereign wealth fund said in a statement Tuesday.
“GIC sought details of how UBS is tightening the control environment and looks forward to the conclusions of on-going investigations.”
It said however that “UBS’ fundamental strength as a well-capitalised bank with a strong private wealth management franchise remains unchanged.”
Swiss media reports said Gruebel is expected to seek a vote of confidence during the meeting.
UBS has not released any details of the board meeting, with a bank spokeswoman confirming only that it “will be held this week.”
But Gruebel, in a separate town hall-style meeting with employees on Tuesday, ruled out a sale of the bank’s investment banking division, Dow Jones Newswires reported, quoting sources.
His remarks are significant because Swiss politicians are putting pressure on UBS to scale down or even spin off its investment bank in the aftermath of the scandal.
Gruebel told employees at Wednesday’s closed, one-and-a-half hour meeting that UBS will retain its investment banking division and that it must be a part of its wealth management business, Dow Jones quoted one person who attended the gathering as saying.
The CEO also said the bank was in a better capital position than it was two years ago.
UBS announced on September 15 that it had lost $2 billion in unauthorised transactions by one of its traders, before upping the sum to $2.3 billion.
A London-based equities trader, Kweku Adoboli, 31, has been arrested and charged over the losses.