Swiss Bank UBS Replaces CEO Overnight

Troubled Swiss bank UBS AG announced in a sudden move Thursday it has replaced its CEO, appointing Oswald J. Gruebel — former head of crosstown rival Credit Suisse — to take over "with immediate effect."

Gruebel's experience in leading Credit Suisse through a turnaround before he left the company two years ago will prove invaluable, UBS said. He replaces Marcel Rohner, who has resigned.

"With his previous employer Credit Suisse, Mr. Gruebel was the architect of a successful turnaround and restored confidence in the company in turbulent times," said a statement from the Zurich-based bank.

UBS has seen confidence by investors, shareholders and clients erode recently — the bank was hit by massive losses related to the U.S. subprime mortgage crisis and is facing legal pressures in the United States over allegations it has helped wealthy Americans evade U.S. taxes.

Gruebel, who from 2003 to 2007 was co-CEO and then CEO at Credit Suisse, said he was convinced that Switzerland needs more than one big global bank.

"The opportunity to lead UBS with its unique client franchise in wealth management, investment banking and asset management in these extraordinary times presents a fascinating, yet formidable challenge to me," he said.

He said he would do all he could "to bring UBS back on a profitable, successful track."

UBS Chairman Peter Kurer said Gruebel "brings the ideal skill set to recreate value, together with our management team, for our shareholders and clients. He will also be adept in balancing our focus on prudent risk taking and client confidence, and our goal to position UBS for future success."

Traders on the Zurich exchange welcomed the move. UBS shares opened at 11.60 Swiss francs ($9.99), up 14.85 percent over Wednesday's close.

Kurer said Rohner had told the bank's board in January of his intention to step down after restructuring moves.

UBS is receiving heavy financial support from the Swiss government in its attempts to recover from losses of tens of billions of francs (dollars) since mid-2007 in U.S. subprime and other toxic investments.

The United States' Internal Revenue Service is seeking to force UBS to turn over records for an estimated 52,000 U.S. customers who allegedly violated American tax laws by concealing Swiss accounts worth at least $14.8 billion.

UBS already has agreed in a deal with the U.S. Justice Department to pay $780 million and disclose up to 300 UBS account holders suspected of tax fraud.