April 23, 2008 / 6:08 AM / in 10 years

Little-known lawyer to lift UBS out of abyss

ZURICH (Reuters) - Putting UBS back on its feet would be a daunting task even for somebody with more banking experience than little-known lawyer Peter Kurer, its prospective new chairman.

The world’s largest wealth manager has notched up the heaviest subprime writedowns of any bank in the world, forcing it to undertake two huge emergency cash injections.

Some shareholders are calling for the bank to break up, fearing that damage in its investment bank could spread to its key business with rich clients.

Kurer, a 58-year-old Swiss, has little banking experience to offer for the Herculean task, but he knows UBS inside out after seven years as its top legal adviser.

“I‘m not sure this is the profile the market had been anticipating,” said Andreas Venditti, equity analyst at Zuercher Kantonalbank, a regional bank.

“The good thing is, he may not be known to the outside world, but inside, he’s well known,” Venditti said.

Kurer is expected to succeed Marcel Ospel at a shareholder meeting on Wednesday, after UBS dumped the man who made it one of the world’s biggest financial institutions only to leave it in its severest crisis ever.

Kurer, a father of three, did not feature in media speculation that included hot shots like Fiat Chief Executive Sergio Marchionne and controversial billionaire Swiss industrialist Christoph Blocher.

But despite his anonymity, Kurer’s qualities are undisputed, say former colleagues.

“He has got what it takes, he’s capable of acting and ... he keeps a cool head in a crisis,” said Heinz Schaerer, who worked with Kurer at Zurich law firm Homburger AG.

“He’s a brilliant lawyer with strong management capabilities, knowledge of the financial industry, and he has a strong sense of fairness,” Schaerer said.

Kurer worked as a lawyer on large mergers and acquisitions, such as the merger of Switzerland’s Brown, Boveri and Sweden’s Asea that created engineering firm ABB in 1988.

An avid skier and reader of literature, Kurer was also involved in the creation of drugmaker Novartis from Sandoz and Ciba-Geigy in 1996, Schaerer said.


Media have speculated Kurer was a stop-gap solution, after UBS, in what looked to be a sudden change of mind, proposed Kurer for the role, saying Ospel had decided not to stand for re-election at Wednesday’s shareholder meeting.

Activist investor Olivant -- controlled by former UBS chief executive Luqman Arnold -- has urged the bank to appoint a heavyweight banker at its helm instead and it remains to be seen what, if anything, Arnold will say at the meeting.

But others defended Kurer.

Urs Schenker, a lawyer at Baker & McKenzie Zurich, who also worked with Kurer in a previous job, said the new man would not need time to get his feet under the table.

“Just imagine an outsider. He would need to get introduced for half a year to what the job is. That’s really what speaks for Peter,” Schenker said.

Pressure on Ospel to resign had been rising for months as the bank kept springing surprises with new credit-related exposure and writedowns and posted a full-year loss in 2007.

Ospel earlier said Kurer was UBS’s “dream candidate”. The two know each other well from the bankruptcy of Switzerland’s former airline Swissair, a painful episode for which many in the country still blame UBS.

Kurer had first represented the Swiss airline as a lawyer, before changing jobs to become general counsel at UBS.

The change in management did not mean the bank would also change strategy, UBS said, and it would stay loyal to its investment bank, the source of its problems.

Additional reporting by John O'Donnell

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