It’s a case of another one bites the financial dust. Ospel, a giant figure of European banking, follows bosses of Citigroup and Merrill Lynch on the lonely walk out of the arena, each deposed by the almighty hand of the sub-prime crisis. But he had little choice: the bank today announced $19bn of fresh asset writedowns on top of the $18.4bn it wrote off in 2007. It makes UBS by far the biggest victim of the turmoil, its losses dwarfing those declared by both Citigroup ($21.1bn) and Merrill Lynch ($22bn).
And it has now announced a humiliating $15bn rights issue to shore up its balancesheet. The fresh hand-out, underwritten by J P Morgan, Morgan Stanley, BNP Paribas and Goldman Sachs, follows a $13bn injection four months ago from the Singaporean Government fund GIC and a mystery Middle East investor.
The bank’s first-quarter net losses hit an estimated $12bn, which could spark a spate of axe-wielding at its London office. Still, there is a vaguely satisfying footnote. In contrast to recent reports of executives receiving whopping pay-outs despite a lack of success, Ospel’s pocket is at least suffering along with the bank’s. His pay for 2007, when UBS made its first annual loss ever, was slashed 90% to $2.5m, down from $26m million in 2006.
Elsewhere, other pay packets have remained impervious to the crisis. Last week it was announced that Bob Diamond, boss of Barclays Capital, earnt close to £36m. Now it emerges that directors of Goldman Sachs took home a near 50% pay rise last year. Then again, Goldman was one of the few banks to emerge from the credit crunch with healthy profits.
Ospel, meanwhile, had already said he wouldn’t expect a bonus for 2007. So the man still has his dignity, at least.