(dpa) -
UBS AG chairman Marcel Ospel faced a stormy shareholders' meeting Wednesday
admitting that Europe's biggest bank had made mistakes as evidence of the
fallout from the US subprime market crisis continued to mount.
The worst-hit of its global rivals, the Swiss financial giant has been forced
to make more than 37 billion dollars in writedowns for assets linked to the US
housing shakeout, which has set shock waves across the world financial sector
and triggered a credit squeeze.
Ospel has already announced his departure and the company has faced calls for
it to be split up with his chief executive officer Marcel Rohner setting out
plans at the AGM for a change the Zurich- based bank's strategy.
UBS will "no longer aim to offer everything to everyone in investment
banking," Rohner told stockholders.
"We have made mistakes, and we have learned our first lessons from
them," Ospel told the 4,000 angry shareholders attending the meeting in Basel. "Our future management will continue to learn from the things we did
wrong."
UBS in-house lawyer Peter Kurer was elected to takeover as company chairman
from Ospel.
While the stockholders' meeting was underway, UBS edged up marginally by 0.4
per cent in early trading. However, the bank's stock has plunged almost a third
in recent months as details of its exposure to risky US mortgage investments
have emerged.
At the meeting, UBS shareholders sign off on a cash injection of about 15
billion francs.
The bank ran up a 4.4 billion-franc loss in 2007. The bank's AGM comes in the
wake of evidence that the subprime mortgage market has still not worked its way
through the international financial system.
On Monday, Wall Street giant Bank of America reported a 77-per- cent slump in
first-quarter profits and 6 billion dollars in writedowns to cover bad loans.
Then 24 hours later, Britain's second biggest bank Royal Bank of Scotland (RBS)
unveiled a record 12-billion pound (24-billion dollar) rights issue to cover
capital reserves following 5.9-billion pounds in writedowns to cover toxic
assets and its costly acquisition last year of Dutch bank ABN Amro.
Only two months earlier, RBS had said it did not need to raise capital. Now,
the bank's financial woes are putting increasing pressure on its chief Fred
Goodwin to announce his plans for the future.
Despite a continuing stream of bleak news from the financial sector, analysts
have become cautiously optimistic that the worst might now be over after a
tumultuous period for finance markets on the back of the credit squeeze and
fears of a US recession.
"The markets have improved in April," said Wolfgang Sprissler who
heads up Munich-based HVB bank, an offshoot of Italy's Unicredit.
But Sprissler warned: "The results from banks will also produce one or
more negative surprises in the next quarters."
In addition, as a sign that slowing US growth triggered by the subprime crisis
has started to hit the global economy, data released Wednesday showed Japanese
exports to the US fell 11 per cent in the first quarter and overall exports
growing at their slowest pace in three years.
Moreover, the trauma that has engulfed UBS has badly shaken Switzerland, where the biggest financial house had built up a reputation for caution and a
conservative approach to banking.
In a 50-page report to UBS shareholders released ahead of the AGM, UBS admitted
that a failure of its risk control systems and a drive to build up business in
risky investments had contributed to its financial woes.