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Bloomberg: UBS to Shorten Ospel Term to One-Year at Re-election (Update1): (*Shell CFO Peter Voser up to his neck in the UBS AG crisis)

By Warren Giles

Feb. 21 (Bloomberg) — UBS AG, under pressure to shake up management after a record loss, said it will reduce Chairman Marcel Ospel’s next term of office to one year from three and appoint a new head of the board’s audit committee.

Shareholders of Europe’s largest bank by assets will vote on re-electing Ospel and two other board members to the shortened terms at the bank’s annual general meeting on April 23, the Zurich-based bank said in an e-mailed statement today.

Ospel, 58, has been chairman for seven years and was the force behind the merger of Swiss Bank Corp. and Union Bank of Switzerland that created UBS in 1998. UBS, the biggest money manager for the wealthy, posted the largest-ever loss by a bank in the fourth quarter after an expansion into mortgage-bond trading at the peak of the U.S. housing market led to $14.4 billion in writedowns.

“With these moves we have strengthened the leadership structure in order to manage UBS’s current challenges,” Ospel said in the statement. “I proposed the new tenure rule to the board, and am prepared, pursuant to their request, to stand for re-election for one year.”

Peter Voser, finance director at Royal Dutch Shell Plc, and Larry Weinbach, the former chairman of Unisys Corp., will also stand for re-election to one-year board terms at the annual meeting, UBS said. Voser will take over from Weinbach as chairman of the audit committee. Fiat SpA Chief Executive Officer Sergio Marchionne was named non-executive vice chairman of the board.

In subsequent elections, all board members will be elected for one year, the company said.

Return to Profit

UBS rose 42 centimes, or 1.2 percent, to 36.32 francs by 9:01 a.m. in Swiss trading. The stock has fallen 30 percent this year, the fourth-worst performance on the 60-member Bloomberg Europe Banks and Financial Services Index.

Chief Executive Officer Marcel Rohner, on an earnings conference call on Feb. 14, described the 12.5 billion-franc ($11.4 billion) fourth-quarter loss as “unacceptable” and declined to predict whether the bank will return to profit in the first quarter.

The bank may face further writedowns this year of between 12 billion francs and 20 billion francs, Citigroup analysts estimated last week.

To replenish capital, UBS is seeking approval at an extraordinary shareholders meeting on Feb. 27 to sell 13 billion francs in bonds that will convert into shares to investors in Singapore and the Middle East. UBS will also be questioned about its risk controls from the Swiss group Ethos Foundation, which is proposing a special audit of the bank.

“I’m proud of UBS’s history,” Ospel told investors and analysts at a meeting in London on Dec. 11. “I’m not proud of the events of 2007.”

To contact the reporter on this story: Warren Giles in Geneva at [email protected]

Last Updated: February 21, 2008 03:31 EST

*Headline comment in brackets added by John Donovan

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