Swiss banking giant UBS has assured shareholders it is well on course to turning around its battered fortunes and expects to return to the black in the third quarter.
The bank, that has lost some $43 billion (SFr49 billion) in the subprime mortgage crisis, made no mention of further writedowns or job losses at the extraordinary general meeting held in Basel on Thursday.
The third shareholders meeting of 2008 was called to announce details of a new strategic approach and to vote on new board members. Shareholders overwhelmingly elected Sally Bott, Rainer-Marc Frey, Bruno Gehrig and William Parrett to the board.
UBS chairman Peter Kurer said the bank was poised to post a small profit in the third quarter of this year and repeated expectations that 2009 would be an overall profitable year. UBS shares jumped seven per cent at the start of the day's trading.
Kurer said that UBS had ridden out the latest financial market sector turbulence "reasonably well" but added that the repair work was not yet finished. "We must fully restore our reputation as quickly as possible. We want to be an accepted industry leader again," he told the meeting.
UBS had previously announced its intention to restructure its management structure and compensation policy. In August, the bank also said it would drop its integrated One Bank model by fully separating its wealth management, investment banking and asset management businesses.
Kurer told shareholders that the foundations for change had already been laid while the bank continues to reduce its exposure to risky assets. "There is no doubt that some issues will not be fixed overnight," said Kurer.
The EGM was noticeably less hostile than the two previous meetings earlier this year, but some shareholders still criticised the high level of pay and bonuses at the bank.
"There is no doubt that the greed of managers has been one of the main causes of the problems. UBS nearly collapsed because of that greed," one shareholder told the meeting.
Another called for shareholders to be given the right to vote on a compensation policy at the bank. Other participants, however, pointed to the recent efforts of UBS management to save the bank.
Kurer said that bonuses would in future be pegged to the financial results of its divisions, creating a more transparent system that "rewards management for sustainable value creation".
The UBS chairman also said it was important to settle a number of legal cases involving the sale of assets to clients and a probe by the United States authorities into tax evasion.
The media had been speculating in recent weeks that UBS would have to write down another SFr5 billion ($4.4 billion) in "toxic assets" this year and would cut another 2,000 jobs from its investment banking division.
The bank will announce its third quarter results on November 4. It posted a SFr358 million loss in the second quarter.
"We have gone through a bad time in the last 12 months but things will improve, especially with the new board that seems a lot more reasonable than the old one," shareholder Barry McGarty told swissinfo.
"They have cut their risk exposure to a large extent so I'm hoping for the best."
swissinfo, Matthew Allen in Basel
UBS endured a tough 2007 and has been in no better shape in 2008 as a result of the US subprime mortgage crisis.
In July 2007, chief executive Peter Wuffli stepped down following the collapse of the bank's hedge fund Dillon Read Capital Management.
In October 2007, UBS said it would cut 1,500 jobs in its investment banking arm, including that of its head Huw Jenkins. Chief financial officer, Clive Standish, left at the same time.
UBS has written down some $43 billion as a result of the subprime mortgage market collapse. Chairman Marcel Ospel stepped down in April.
The bank was then investigated for allegedly helping US citizens evade taxes, following a confession from a former employee. The case led to UBS stating it would stop offshore banking activities in the US.