UBS replaces investment bank chief with co-CEOs

UBS AG surprisingly replaced Jerker Johansson as the head of its investment bank on Monday with two of its senior executives.

The bank, until recently Switzerland’s largest in terms of market capitalization, named Alex Wilmot-Sitwell and Carsten Kengeter as co-CEOs of the branch that has cost UBS billions of dollars in bad investments linked to the U.S. subprime mortgage debacle.

Wilmot-Sitwell is a board member and has led UBS’ Europe, Mideast and Africa division, while Kengeter is joint head of the bank’s fixed income, currencies and commodities section.

Johansson, replaced with immediate effect, had been in the job little over a year.

“I would like to thank Jerker for his great efforts and his valuable contribution to the repositioning of our investment bank,” UBS Chief Executive Oswald Gruebel said.

Gruebel said the investment bank under the new joint chiefs would “continue to build on the strong core businesses of our investment bank and remediate our legacy risks.”

Last week UBS announced the sale of its Brazilian business for about $2.5 billion in an effort to reduce risk and streamline its operations, a move welcomed by analysts as returning UBS to its core operations.

The investment bank lost over $18 billion last year, contributing heavily to UBS’ woes and the need for a massive bailout from the Swiss government and national bank.

UBS is also cutting thousands of jobs.

Shares closed up 4.1 percent at 14.58 Swiss francs ($12.59) in Zurich.