Ex-UBS president may seek break-up of bank: report

NEW YORK (Reuters) - Luqman Arnold, a former president of UBS AG (UBSN.VX), is pushing for a potential break-up of the troubled Swiss bank, the Wall Street Journal said in its online edition on Thursday.

Arnold is chairman of Olivant Advisers Ltd in London, which holds a 0.7 percent stake in UBS worth about $470 million, the report said. Arnold had served as UBS' president before being ousted in December 2001 after a dispute over strategy with current Chairman Marcel Ospel.

The challenge follows UBS' announcement this week that it will raise 15 billion Swiss francs to bolster capital, after a $19 billion write-down tied largely to U.S. mortgages led to a roughly $12 billion quarterly loss. Ospel said he would quit as chairman and be replaced by in-house counsel Peter Kurer.

Citing a letter from Arnold to the UBS board, the Journal said Arnold believes UBS should separate its investment bank from its private-client bank and ultimately sell the investment bank, and sell its asset-management arm to raise capital.

A representative in Olivant's office in Singapore declined to comment. A call to Olivant's office in London was not immediately returned.

UBS also did not immediately return a call seeking comment. An earlier version of the Journal article said Arnold's letter was sent Thursday night, and that a UBS spokesman said he was not aware the bank might have received such a letter. A later version of the article did not include these details.

The ouster by UBS of Arnold, who is British, came just eight months after he had taken up his post at UBS, in what the bank at the time hailed as a move toward a more international management culture.

Arnold was replaced by Peter Wuffli, who would become UBS chief executive in 2003. Wuffli was replaced in 2006, before the subprime mortgage crisis, but UBS was even then facing calls to bolster results and consider a break-up.

Olivant on its Web said it invests where "an opportunity exists to increase shareholder value through strategic, structural and operational change," and where it has "the necessary influence directly or through agreement with other shareholders to implement the changes."

After leaving UBS, Arnold became chief executive of Britain's Abbey National Plc, and sold that company to Spain's Banco Santander SA (SAN.MC).

(Reporting by Jonathan Stempel; Editing by Gary Hill; editing by Carol Bishopric)