UBS CEO says the bank is over the worst -paper

ZURICH (Reuters) - Swiss bank UBS (UBSN.VX) is over the worst of its problems and is strong enough to manage its risks and positions, the group's chief executive was quoted as saying on Sunday.

"We are no longer at the lowest point. There are certain factors that we cannot influence, however, such as the U.S. real estate market. There, there is volatility," CEO Marcel Rohner said in an interview with Swiss newspaper SonntagsZeitung.

"But we are strong enough to manage our risks and our positions. Now it is about winning back the destroyed trust on the customer side," Rohner told the newspaper.

Board member Peter Kurer, proposed by the board as a replacement for Marcel Ospel as chairman later this month, said in an interview published on Saturday that writedowns at the world's largest wealth manager had already been so aggressive they could not get any worse.

UBS has written down around $37 billion in assets and cleaned out most senior management, including its chairman, after asking investors for emergency cash twice in two months, making it the world's hardest-hit bank from the subprime crisis.

Rohner said UBS would announce in May how many jobs would be cut in its investment bank, the source of the losses, but said estimates that 3,000 to 4,000 jobs would go in this division were too high.

The fixed-income business will be most affected by the job cuts, he said.

Rohner also said he was seeing trading in areas where there had been no markets for months.

"This is generally a sign that an end (of the financial crisis) is foreseeable," Rohner said.

His comments echo those of Goldman Sachs Group (GS.N) Chief Executive Lloyd Blankfein, who on Thursday said markets were probably in the late stages of the global credit crisis that began last summer, but he, like Rohner, would not venture a prediction for when it would end.

WORKOUT UNIT

Earlier in April, UBS said it would hive off ailing proportions of the bank into a separate unit, and Rohner told the newspaper UBS was looking at two possible ways of doing this.

One way would be to place the positions in a Special Purpose Vehicle (SPV), which UBS would capitalise with equity and in which third-party investors would be able to take a stake, the newspaper reported Rohner as saying.

The second possibility would be to distribute the securities to existing shareholders through a separate, newly founded entity, a process that could take between four and seven months, Rohner said.

Rohner is also still looking to sell the positions, if it can find a buyer, the newspaper reported.

The creation of a so-called workout unit, sometimes called a "bad bank," would allow UBS to confine the credit problems to a separate division, permitting management to focus on the group's profitable operations and investors to assign value to them.

(Reporting by Katie Reid, editing by Will Waterman)