As further details emerge regarding its recent $2.3 billion trading loss, UBS interim CEO Sergio Ermotti has decided against spinning off or selling the investment bank and, instead, plans to reduce its size, especially in its fixed-income work, according to a report in Thursday’s Wall Street Journal.
Ermotti was appointed chief following Oswald Gruebel’s resignation in September after UBS’ investment bank revealed losses due to the actions of an alleged rogue trading. The co-heads of global equities, Francois Gouws and Yassine Bouhara, also have left, and the bank has suspended some front-office staff, a recent Reuters report says.
UBS is set to report its third-quarter results next Tuesday. It is expected that Ermotti could outline his plans at an investor meeting on Nov. 17, according to the Wall Street Journal, which also suggests that Ermotti may cut some capital access for the investment bank and share more resources with UBS wealth-management operations.
The bank did not return a request for information to AdvisorOne.
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Meanwhile, prosecutors in London said Thursday that Kweku Adoboli, the trader accused of losing $2.3 billion by making unauthorized trades, falsified records specifically on exchange-traded-fund transactions, according to a Bloomberg report published Thursday.