UBS Former President Pushes for Bank Break-up Amid Losses
Former President UBS AG and British investor Lugman Arnold is pushing for a break-up of the bank after the Swiss-based company posted $37.7 billion in debt securities write-downs, erasing more than half its market value in the past year.
Luqman Arnold's activist-shareholder campaign for the UBS to break up marks a rematch with the bank that forced him out in 2001 after a dispute over governance and how much power he would have. Among Mr. Arnold's proposals: UBS should legally separate its investment bank from its private-client bank and consider selling the investment bank; sell its asset-management business to raise money; and remove the chairman it named just Tuesday, according to a letter Mr. Arnold sent to UBS Thursday night.
The surprise attack from Mr. Arnold, chairman of London investment firm Olivant Advisers Ltd., promises to increase acrimony inside UBS, which has gutted its leadership since becoming one of the hardest-hit banks in the credit crisis.
A spokeswoman for UBS confirmed Friday receipt of a letter from Olivant and said the bank will respond in "due course" and in "appropriate form."
Shares in UBS rose 4.4% in mid-afternoon trading Friday to 33.84 Swiss francs ($33.48) on news of Mr. Arnold's efforts.
UBS, created by the 1997 merger of Swiss Bank Corp. and Union Bank of Switzerland, has been under pressure from other shareholders to split off its investment bank. They blame the division for moving the traditionally conservative bank into trading complex mortgage securities that led to the write-downs and wiped out profits in 2007 and in the first quarter of this year.
Published on April 4, 2008
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