The senior vice president of SBC succeeded, largely by making swift changes that included cutting duplicated jobs, such as those in US Treasuries trading. After this year's $600m (pounds 352m) acquisition of US investment bank Dillon Read, SBC counts Warburg Dillon Read as one of its most profitable units.
Now SBC is calling on Mr Ospel again. This time round, however, he is chief executive of Swiss Bank Corp, and the job he faces is even bigger: combining SBC and its larger rival, Union Bank of Switzerland, into United Bank of Switzerland, in what will be the world's second-largest bank.
At the new bank, Mr Ospel will have to be tough enough to fire 13,000 of the banks' 56,000 workers - 3,000 of them in London - and diplomatic enough to avoid being blocked by unions or government officials. People who know him say he's the man for the job.
"He comes across as an easy-going, charming person, but in reality he's very tough," said Hans Kaufmann, an analyst and fund manager at Bank Julius Baer. "If he sets his mind on something, he normally sees it through."
Ospel's bargaining skills are reflected in United Bank of Switzerland's senior management, which will be dominated by SBC executives. Three of the new bank's four divisions will be run by Ospel's colleagues: Gary Brinson will run asset management, while Johannes de Gier, who succeeded him as head of investment banking, will continue to run the division and Rodolfo Bogni will head private banking.
Mr Ospel already has plans, saying the bank will expand its investment banking unit by creating a hub in London. Almost all of the two banks' London employees work in investment banking, and the merger will result in the loss of up to 3,000 jobs in the City. SBC has 3,500 employees in London, while UBS employs 2,900 people there.
Mr Ospel will also have to combine SBC's fund management business with that of PDFM, which this month lost the right to manage the Church of England's pounds 150m pension fund.
"United Bank of Switzerland will be a banking group which will be very definitely on the map," said Ospel, adding that his greatest personal achievement is "to survive".
Mr Ospel was named head of SBC Warburg after SBC's then-chief executive, Georges Blum, concluded an pounds 860m takeover of SG Warburg Group in 1995, and promptly defied those who said Warburg's employees couldn't work with the Swiss.
He faces a similar task in knitting together United Bank of Switzerland: SBC's meritocratic culture may clash with the more military-style management of UBS, which only last year broke with tradition by appointing as chief executive someone who isn't serving as an officer in the Swiss army - Mathis Cabiallavetta, 52.
"We've had a deep friendship over many years," said Mr Cabiallavetta, who will work with Ospel as chairman of the new United Bank of Switzerland. Both men, the new breed of young Swiss managers trained in the US, list golf as a hobby, though the UBS manager claims that he is the better player of the two.
Like Cabiallavetta, Ospel served in the lower ranks of the Swiss army, a further sign of change in a country where army officers have traditionally dominated corporate boardrooms.
"When I first met him, I was impressed by how modern Ospel's office looked," said Rolf Meyer, Chairman of Ciba Specialty Chemicals, who survived a purge and will be one of 10 members on United Bank of Switzerland's board, compared with the 38 people who sit on the boards of UBS and SBC. "He has always stuck out from the more traditional Swiss bankers."
Ospel, who is married, likes to protect his privacy and is reluctant to discuss his life outside the office. He does, though, disclose that his busy schedule allows little time for skiing, despite his love of the outdoors.
Combining Basel-based SBC with Zurich-based UBS will lead to 13,000 job losses - about 7,000 of them in Switzerland - and comes after SBC has already cut 1,700 jobs in a huge reorganisation, while UBS has already shed some 1,100 jobs.
"Ospel gives the impression of being as hard as nails," said Urs Tschumi, general secretary of the Swiss Banking Personnel Association.
The merger will come just after Switzerland's carnival season, a highlight of which is a night-time parade through the streets of Basel, overlooking the River Rhine. Ospel, who said his hobbies are contemporary art and enjoying the outdoors, regularly participates, and is likely to be the object of either praise or satire at this year's event.
At the carnival last year, Ciba-Geigy and Sandoz bore the brunt of the scorn for uniting into Novartis, the world's largest drug-maker, and eliminating 12,000 jobs.
Not everyone at this year's carnival will be celebrating; for some employees, Switzerland's biggest banking transaction will have painful consequences. Still, analysts said the job losses are necessary if Ospel is to improve his bank's performance - and cement his reputation as one of Switzerland's most dynamic bankers.
"Ospel is a man of vision," said Madeleine Hofmann, an analyst at Credit Suisse. "Under him, SBC's performance has improved dramatically."
While expanding abroad, Ospel also revamped SBC's lagging domestic unit, writing off bad loans and cutting the number of branches. Rivals, such as UBS, said they wouldn't do anything like it. Months later, they followed suit.
In the past five years, SBC's return on equity, a measure of profitability, averaged 3 per cent which constitutes a small fraction of that earned by competitors such as Merrill Lynch (23 per cent average in the past five years) and Citicorp (19 per cent). UBS, at 6.3 per cent, wasn't much better.
SBC last year posted a net loss of Sfr1.95bn ($1.37bn). This year, analysts had expected earnings to be better than the record Sfr1.365bn net profit in 1993, as investment banking and money management revenue grows. Today, though, UBS and SBC said they will probably post another loss this year, after taking charges totalling Sfr7bn.
Ospel, a graduate of the School of Economics and Business Administration in Basel, joined SBC's marketing department in 1977. He spent five years at SBC in New York and London, had a two-year spell at Merrill Lynch in Zurich, and rejoined SBC as senior vice president in 1987.
He is the former head of global markets at SBC, and ran the bank's international and finance division before becoming head of SBC Warburg.
Investors' confidence in Ospel is reflected in SBC's shares, which have risen 86 per cent this year, outperforming those of UBS, which has gained 84 per cent.
Copyright: IOS & Bloomberg