Published March 9, 2009

No more state aid may be needed: new UBS chief

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(ZURICH) Kaspar Villiger, chairman-designate of Swiss bank UBS, hopes it will not need a second government bailout package, the Sonntagszeitung newspaper reported yesterday.

Mr Villiger: 'Banking secrecy is important for Swiss banks but is not the only and not the most important factor for success anymore'

'We hope very strongly that this will not be the case,' former Swiss finance minister Villiger told the paper in an interview, when asked whether the bank would need more government help.

'The bank has done a lot to recover under (chairman) Peter Kurer and (former CEO) Marcel Rohner,' Mr Villiger said.

UBS, struggling to rebuild its brand after investments in risky US assets forced it to make bigger writedowns than any other European bank, accepted six billion Swiss francs (S$8 billion) government aid last year.

In addition, the Swiss National Bank set up a fund for troubled assets from UBS. In February, the central bank cut the original size of this fund by a third to just under US$40 billion.

UBS announced Mr Villiger's nomination as chairman on Wednesday, completing a top-management clearout one week after the appointment of former Credit Suisse head Oswald Gruebel as its new chief executive.

Mr Villiger told the newspaper UBS would continue to do business in the United States despite an ongoing row with US tax authorities, putting Swiss banking secrecy in the spotlight.

Switzerland came came under pressure after allowing UBS to disclose the identity of about 300 US clients to avert criminal charges. US tax authorities are still pursuing a civil lawsuit against UBS, seeking to access data on another 52,000 Americans.

Mr Villiger said a solution to the dispute over Swiss banking secrecy would reduce pressure on UBS. 'Banking secrecy is important for Swiss banks but is not the only and not the most important factor for success anymore,' he was quoted as saying. -- Reuters