Oswald Grübel resigned as chief executive of embattled Swiss bank UBS AG in the wake of a trading loss that cost the bank more than $2 billion and now has cut short the career of a giant of Switzerland’s business community.

In a statement Saturday, UBS said its board had accepted Mr. Grübel’s resignation. UBS Chairman Kaspar Villiger said on a conference call that the board had not sought Mr. Grübel’s resignation and had asked him not to resign immediately, but that he had insisted.

Mr. Grübel said a week ago that he had no intention of resigning. But on Saturday, he told employees in a memo: “As CEO, I bear full responsibility for what occurs at UBS. … I did not take the step of resigning lightly. I am convinced that it is in the best interests of UBS to approach the future with a new leader at the top.”

UBS said Sergio Ermotti, who runs its European region, would become CEO on an interim basis, effective immediately.

Mr. Villiger said that Mr. Ermotti was a strong candidate to become the bank’s permanent CEO, but that the board would decide in the coming months, possibly by next spring. He said the board would consider both internal and external candidates.

Mr. Villiger indicated that Carsten Kengeter, head of the investment-banking unit where the loss occurred, was safe in his job. He said the investment-banking chief had handled the crisis well and added: “I do not see any reason to doubt the future of Carsten Kengeter.”

Mr. Kengeter had been seen as a rival to Mr. Ermotti to succeed Mr. Grübel. Mr. Villiger on Saturday declined to say whether Mr. Kengeter was a candidate for the permanent CEO job.

UBS on Saturday also addressed questions about whether the scandal would further dent its commitment to the investment bank, which has produced one giant headache after another for the firm in recent years.

In the statement, held in the wake of a board meeting in Singapore that lasted several days, UBS “reconfirmed” its goal of being a full-service bank, offering products including wealth management, investment banking and asset management. But it said it would accelerate a plan to pare down and focus the investment bank more on advisory, capital markets, and client-trading businesses, rather than risky proprietary-trading.

Source: The Wall Street Journal

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