New UBS boss admits to 'damage'

UBS has suffered more than any other bank from the US sub-prime disaster

The new chairman of UBS has admitted the Swiss bank has suffered "reputational damage" from the huge losses sustained in the credit crunch.

Peter Kurer told the Financial Times the bank could take two to three years to recover from the problems caused by failed US mortgage-backed investments.

It has amassed $37.4bn in losses so far, the largest of any leading bank.

Criticism of the bank's strategy led to the resignation of Mr Kurer's predecessor, Marcel Ospel.

'Leadership'

Several angry shareholders, most notably former chief executive Luqman Arnold, have called for the business to be broken up.

Mr Kurer acknowledged the scale of the problems at the bank but said he was determined to provide the "leadership" necessary to revive its reputation.

Peter Kurer (right) was previously legal adviser to Marcel Ospel

"We shouldn't fool ourselves. We cannot pretend there has been no reputational damage," he said. "Experience says it goes away after two to three years."

Speculation has grown in recent days about the likelihood of significant job losses at the firm's investment banking business.

UBS has said it is reviewing its operation in an effort to increase efficiency but would not be making any announcement until the start of next month.

The bank alarmed investors and the market in general earlier this month when it disclosed $19bn of fresh asset writedowns linked to the troubled US mortgage market on top of the $18.4bn it wrote off in 2007.

MAIN CREDIT CRUNCH LOSSES UBS: $37.4bn Merrill Lynch: $22bn Citigroup: $21.1bn HSBC: $17.2bn Morgan Stanley: $9.4bn Deutsche Bank: $7.1bn Bank of America: $5.3bn Bear Stearns: $3.2bn JP Morgan Chase: $3.2bn BayernLB $3.2bn Barclays: $2.6bn IKB: $2.6bn Royal Bank of Scotland: $2.6bn Credit Suisse: $2bn Source: Company reports Timeline: Sub-prime crisis

At the same time, it said it expected to make a first-quarter loss of more than $12bn and was seeking to raise $15bn in capital by issuing new shares.

Mr Kurer, previously the bank's chief lawyer, succeeded Mr Ospel after the embattled former chairman and chief executive admitted full responsibility for the firm's plight and stood down.

Speaking to the FT, Mr Kurer said repairing the damage done in recent times would not be easy but said he had the right credentials for the task.

"People should judge me on actions not concepts," he said. "I have not accepted this job on an interim basis. The company needs leadership and to know who is at the helm."

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