Oswald Grübel, UBS

Monday 17th May 2010

Born: November 13, 1943, in East Germany
Education: Apprentice in banking and securities at Deutsches Bank; International Institute for Management Development
Career:
1970: Eurobond trader, White Weld Securities;                         
1978: CEO, White Weld Securities;                          
1985: Corporate Chairman and Chairman of Futures Trading in Zurich;                                 
1987: CEO of Hong Kong division;                              
1988: Deputy Chairman;      
1991: Member of Group Executive Board;                 
1997: Member of Executive board, Crédit Suisse Group; 1997: Head of Global Trading Credit Suisse First Boston; 2002: CEO, Crédit Suisse Financial Services;                            
2003: Co-CEO, Crédit Suisse Group;                                       
2004: CEO, Crédit Suisse Group;                                      
2009: CEO, UBS

Coming out of retirement is daunting. Attempting a comeback during the worst industry crisis in living memory is perhaps foolhardy. For Oswald Grübel the challenge was so enticing he took it on twice - first with Switzerland’s second largest banking group, CSG, and then two years later with UBS, the Swiss number one.

What is remarkable is how the man has succeeded where others failed. Grübel retired from CSG with record profits in 2007, but then came back in 2009 to help his former rivals at UBS. The company has just announced quarterly profits for the first time in a year.

He is no ordinary bank manager. Oswald Grübel was born in East Germany, on November 13, 1943, during World War II. Little is known of family life, other than that he is a divorcee and a father to an adult daughter living in London. Orphaned as a child during the war, he was brought up with relatives - first with his grandparents in Thuringia, and then in Frankfurt by other family members. Grübel’s professional life more tellingly reveals a determined, skilful, down to earth character who has garnered a global reputation as one of the most astute investment managers in the world.

Affectionately known as Ossie, he did not attend university – enrolling instead as a 17-year-old trainee on a vocational course in banking and securities. He traded in Mannheim and Frankfurt at the Deutsches Bank from 1961 to 1970, initially as an apprentice. After being identified as a junior of some potential, he was put through the International Institute for Management Development in Geneva during the late 1960s. He went on to join White Weld Securities in 1970 as a floor trader, a definitive move that would shape his career as an investment-banking specialist.

The young manager proved the talent scouts correct by climbing the ranks quickly. He became CEO of the London and Zurich-based Eurobond house in less than eight years. Crédit Suisse gained a majority share in White Weld, offering a further opportunity for the talented CEO to develop his managerial skills further.

Crédit Suisse took over the firm as Financière Crédit Suisse White Weld in 1974. Grübel led the White Weld unit for seven years while working on a series of company assignments in Europe and Asia. He became a member of the executive team by the 1980s, with responsibility for global foreign exchange and money markets, where he impressed.

In 1998 he moved from trading to run the group’s private banking operations.

Although CSG was the second-largest bank in Switzerland, the company had a long history of involvement in insurance interests. The firm increased that interest in 1997 under the leadership of CEO Lukas Mühlemann by purchasing Winterthur Insurance for €5bn. That deal was among several others that proved to be too costly. By 2000 the company’s shares had halved in value.

Grübel, having opposed many of those decisions and policies, took early retirement in 2002 - a move that surprised some. But when Mühlemann stepped down a few months later, he was called out of retirement to become co-CEO with John Mack, from January 1, 2003. It was a significant moment, and the first of two Grübel come-backs that stunned the industry.

He focused the business on financial-services operations from Zurich, and by 2004 was named as sole chief executive. By the time he retired for the second time on May 5, 2007, he had turned the company around with record results in 2006.

“We owe a great debt of gratitude to Oswald J. Grübel, whose leadership has been key to this success,” said CSG Chairman Walter B. Kielholz, Chairman of CSG, who described the ‘enormous improvement in profitability and shareholder value’ under Grübel’s leadership. Two years later in 2009, Credit Suisse’s arch rival UBS announced the departure of chief executive Marcel Rohner.

Grübel was again called out of retirement, this time to replace a man more than 20 years his senior. He became CEO of UBS on February 26, 2009. The UBS board said the appointment represented a ‘step to restore stakeholder confidence and to pave the way back to success’.

Although the bank still had a vast client base in wealth management, investment banking and asset management, errors had led to major losses. In 2008 the company announced it had made a net loss of 20.9 billion francs, leading to a subsequent rescue by the Swiss government. Confidence among investors, customers and staff was at an all time low. But although UBS was considered to be among the worst banking casualties of the credit crisis, the share price rose by more than 15 percent when Grübel’s appointment was announced.

UBS chairman, Peter Kurer, spoke of Grübel’s ‘indisputable leadership qualities and extensive expertise’. Grübel said he relished the opportunity to lead again during ‘these extraordinary times’. He added: “Together with our 77,000 dedicated employees, I will do all I can to bring UBS back on a profitable, successful track.”

In April 2009, as widely expected, the company announced a billion-dollar loss in the first quarter of the year. By April 2010 Grübel had recorded a fourth quarter profit of CHF 1,205 million – a turnaround that was achieved on the back of a CHF 20.2 billion reduction in fixed costs and 7,500 redundancies. More of the same will follow this year.

Grübel – now a pensioner who shows no signs of wanting to retire for a third time - says the company is delivering on its plan for ‘a new UBS’, demonstrated by its return to profitability and strengthened capitalisation. He insists the management is confident that the firm’s reputation will be restored with tangible results.

“We entered 2009 at the height of the crisis,” he said. “By the end of 2009, UBS has returned to profitability, delivering on its priorities. We expect that our return to profitability will increase clients’ confidence in UBS and restore our reputation.”

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