UBS risk chief steps down

Joseph Scoby, who has led UBS' risk department during one of the most disastrous years in the bank's history, has stepped down, to be replaced by his deputy, Philip Lofts.

Scoby took over as group chief risk officer in October 2007, when the bank reported $3.4 billion writedowns in its fixed income, rates and currencies division; his predecessory, Walter Stuerzinger, became the bank's chief operating officer.

In the next twelve months, UBS reported another $42.2 billion in writedowns related to the US subprime mortgage crisis, making it one of the worst-affected banks in the world. The strain on its balance sheet culminated in last month's news of a $60 billion bailout of UBS by the Swiss National Bank.

Scoby returns to his old job as global head of alternative and quantitative investments in UBS Global Asset Management. He will also leave the bank's executive board. His successor, Lofts, was appointed as group risk chief operating officer in May this year - he was previously group chief credit officer.

UBS also announced overall profits for the third quarter of the year - the bank made a net profit of SFr 296 million, its first profitable quarter since the start of the crisis in mid-2007.

However, it also reported $4.4 billion in losses on "legacy risk positions", mainly related to exposure to US residential mortgage-backed securities. And it warned that it could see heavy losses again in the fourth quarter of this year, for two reasons. Firstly, narrowing spreads on its own debt could force it to take a charge of "some or most of the accumulated SFr 4.8 billion" in gains it had previously logged; and the transfer of $60 billion in illiquid assets into the SNB-run rescue vehicle would lead to an unspecified loss on the sale of the equity in the fund.

See also: Swiss National Bank to take $60 billion in UBS assets
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