Warburg chief quits as losses hit pounds 430m

HANS DE GIER, one of the City's most illustrious bankers, is to retire as chairman and chief executive of Warburg Dillon Reed after 18 years with the firm. His departure comes after a year in which the investment bank reported pre-tax losses of more than one billion Swiss francs,(pounds 430m), mostly as a result of exposures to Long-Term Capital Management, the hedge fund.

The losses, which hit during last year's disastrous third quarter, prompted the resignation of Mathis Cabiallavetta, as chairman of UBS, WDR's Swiss banking parent, at the height of last autumn's financial crisis in October.

Largely as a result of the difficulties at WDR, UBS yesterday disappointed the markets with profits before taxes and restructuring charges of Sfr4bn for 1998, a fall of 35 per cent compared with the year before.

Marcel Ospel, the group chief executive, denied the timing of Mr De Gier's departure was in any way linked to last year's financial upset. He said that Mr De Gier, 55, had expressed his wish to step down before the UBS and SBC merger was announced in 1997. With this now complete it was the right time for him to leave.

He will be replaced by Markus Granziol, who joined the firm in 1987. In an internal memo circulated to WDR staff, Mr Ospel praised Mr De Gier for his "immense contribution" to the firm. He credited him with having established Warburg Dillon Reed's position as the leading European investment bank. Mr De Gier is still remembered in the City for the ruthless efficiency with which he implemented the takeover of SG Warburg by what was then Swiss Bank Corporation. Since then the firm has been merged twice more - with Dillon Reed, the American investment bank and more recently with UBS, SBC's long-standing Swiss rival which it rescued 18 months ago.

As part of the same top management reshuffle announced yesterday, Gary Brinson, the founder and head of UBS Brinson, UBS's fund management arm, is giving up his management duties to return to the investment side of the business. His place will be taken by Peter Wuffli, currently chief financial officer. David Solo who as chief risk officer oversaw the review of the WDR business after the LTCM debacle, is at his own request moving back to his native US, where he will be put in charge of developing new business for the group in the technology area.

Peter Wuffli the CFO, said that because of the losses at WDR, which left insufficient cash in the bonus pool, the group was having to dig into its merger restructuring reserve to pay out bonuses to Warburg staff.

He said the group was still seeking to acquire businesses in the US, but would consider buying back up to 10 per cent of the bank's stock from shareholders if it were unable to find a suitable target.

Mr Ospel said that with the merger of UBS and SBC now complete and the review of WDR having resulted in a firm using less capital and more focused on client-related business, the "new UBS" was "on track to meet an ambitious set of growth targets.

He said there was a clear focus on "growth in asset gathering, advisory and asset management business". However, he insisted that UBS was not talking about a major US acquisition but "selectively building up our US sectoral expertise." He said: "We are on course to for 1999 and we expect a significant profit increase which will bring us close to our return on equity target of 15-20 per cent."

The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Rio Ferdinand returns for QPR
sportRio Ferdinand returns from his three-game suspension today
The Speaker of the House will takes his turn as guest editor of the Today programme
arts + ents
ebooksNow available in paperback

Watch the spoof Thanksgiving segment filmed for Live!
Billy Twelvetrees will start for England against Australia tomorrow with Owen Farrell dropping to the bench
rugbyEngland need a victory against Australia today
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
Tyson Fury poses outside the Imperial War Museum in south London ahead of his fight against Dereck Chisora
boxingAll British heavyweight clash gets underway on Saturday night
i100 Charity collates series of videos that show acts of kindness to animals
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Austen Lloyd: Company Secretary

Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

Citifocus Ltd: German Speaking Client Specialist

£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

Citifocus Ltd: Performance & Risk Oversight

£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game