UBS still needs to get rid of investment bank: activist investor

Knight Vinke has been calling for change at UBS (UBSN.CH)for two years, saying its investment bank is unviable and should be spun off so the bank can focus on its wealth and asset management businesses.

Two letters sent to the bank in recent weeks by Knight Vinke Chief Executive Eric Knight show that view remains, based on the investment bank continuing to receive "a huge funding subsidy" from the rest of the bank.

"This leads us to the conclusion that UBS needs to be radically streamlined, just as many of its global universal banking peers are doing ? with a new strategy and possibly under new management ? or absorbed into an organization that is better able to take on this task," Knight said in a letter dated March 27.

In a follow up letter dated April 13 Knight said its questions about how the investment bank was funded had not been answered by the bank.

Knight told UBS he would be willing to join UBS's board, which he said "may be too dependent on the views of current or former investment banking professionals".

Knight Vinke published a response from UBS dated April 8. A spokesman for the bank said: "We don't comment on our interactions with individual shareholders. The forum for public discussion with shareholders is our Annual General Meeting even when we are faced with parties who choose to selectively disclose responses we have given in private."

(Reporting by Steve Slater in London and Joshua Franklin in Zurich; editing by Susan Thomas)