Magazine article American Banker

UBS Ousts Its President, Citing 'Differences in Opinion'

Magazine article American Banker

UBS Ousts Its President, Citing 'Differences in Opinion'

Article excerpt

The president of UBS AG, Luqman Arnold, was dismissed Tuesday, and Peter Wuffli, the former chief executive officer of its asset management unit, was named his successor.

Mr. Arnold's firing "reflects a number of differences in opinion," said Mr. Wuffli, the only executive to address the issue during a conference call Tuesday from Zurich. The changes are effective immediately.

"There are no financial, operational, or control issues behind it, and there will be no change in UBS' strategy, focus, direction, or values," Mr. Wuffli said.

He offered few details of what the differences in thinking were, despite a grilling from analysts. "The board of directors made it very clear that we will not disclose the individual reasons and the sources of these differences in opinion," he said, "and there is also not a single specific event or a single specific factor one can point to."

Left to speculate, analysts suggested several scenarios, including that Mr. Arnold had been reluctant to use the company's balance sheet to get investment banking business.

But Mr. Wuffli denied that this was behind the sudden upheaval. "We continue to believe that corporate finance needs to be based on the quality of advice and not on the balance sheet," he said.

"Obviously we recognize that the market is demanding it more and more, and this leads to tricky decisions, as you have seen in the case of EchoStar," Mr. Wuffli said. "I'm absolutely sure that our attitude toward the balance sheet hasn't changed, and we remain skeptical that leading with the balance sheet is a way to outbuild sustainable investment banking franchises over time. …

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