UBS chairman Marcel Ospel quits

LONDON: UBS chairman Marcel Ospel committed hara kiri and quit on Tuesday morning as the Swiss bank wrote off another $19 billion (��9.6 billion) in US real estate and related structured credit positions, bringing the total damage from the US sub-prime implosion to about $37 billion.

Indices in Europe however, rose on hopes that the final news from UBS and Deutsche signals the beginning of the end of the credit crisis.

Banks are pushing Footsie higher on hopes that a major house cleaning exercise by UBS will mean that all the bad news is out.

Shares in UBS rose this morning as investors welcomed the departure of Mr Ospel and speculated that the series of write-downs by the bank on US subprime and structured credit must now be over.

UBS shares rose by 10% in European markets, to SwFr31.80; the FTSE rose by 1.32 %, while the Dow was up 0.38% at midday. UBS also announced a Sfr15bn (��7.5bn) rescue rights issue. Inhouse UBS general lawyer Peter Kurer will replace Marcel Ospel.

After the fresh sub-prime losses, UBS posted an estimated first-quarter net loss of SwFr12 billion.

The fresh injection of capital is fully underwritten by J P Morgan, Morgan Stanley, BNP Paribas and Goldman Sachs and follows a SwFr13 billion capital injection only four months ago from the Singaporean Government fund GIC and a mystery Middle East investor.

UBS also announced plans to ring-fence its remaining toxic assets in a portfoilio work-out unit: This would initially be wholly owned by UBS but the plan is to reduce the bank's exposure to it, whilst avoiding a fire sale of the assets at severely distressed prices.

Its losses dwarf those declared by US banks such as Citigroup ($21.1bn) and Merrill Lynch ($22bn), and is cause for concern among Swiss banking circles as bank after bank takes a hit.

Deutsche Bank has warned it expects to write off about 2.5bn euros ($3.9bn; ��1.9bn) in the first three months of 2008 because of the sub-prime crisis.

Mr Kurer, 58, is regarded as one of Europe's most influential in-house lawyers. He joined UBS from Homburger, a Swiss law firm, in 2001 and became a member of the Group Executive Board in 2002. He was also a member of the Corporate Responsibility Committee.