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."