By Lisa Jucca
ZURICH (Reuters) - UBS (UBSN.CH)Chairman Peter Kurer is a stern lawyer who embodies the values of conservative Swiss banking -- the exact qualities the bank is desperate to revive after a disastrous venture into risky investment banking.
But local competitor Credit Suisse, under the leadership of U.S. former investment banker Brady Dougan, has quietly stolen the mantle of Swiss sobriety, despite the outsider at its helm, in a role reversal of the two Swiss banking giants.
"UBS used to be the pillar of conservatism in Swiss banking. Up until 2006 it was even boring to look at them as the bank booked record results after record results," said Rainer Skierka, an analyst with Bank Sarasin.
"Credit Suisse has in the past certainly been viewed as more aggressive, especially in investment banking. But, as it turned out, aggressiveness did not mean they accumulated risk in the same way as competitors did," Skierka said.
By hiving off UBS' troubled assets into a separate fund in return for a stake in the bank, as announced this week, the Swiss government is helping Kurer in his quest to mend the bank's wounded brand.
But it is going to take the former general counsel of UBS more than just a few weeks to erase the memory of about $46 billion of writedowns, while his American counterpart Dougan has won praise for daring to brave the crisis without state aid.
While UBS had little choice but to accept the government plan, Dougan said he politely turned down the offer to join the central bank's fund and chose instead to raise 10 billion Swiss francs ($8.81 billion) from other investors.
"This is a big point for Brady Dougan and for Credit Suisse, which for the last 10 years has always been in the shadow of the larger rival," said Teodoro Cocca, who chairs the Wealth and Asset Management department at the Kepler University of Linz.
"But it is hard to say how much of the absence of Credit Suisse from the subprime victim list is due to pure luck and how much is explained by wiser risk management," Cocca said.
STILL STANDING
Dougan, born in 1959, was one of the youngest global bank CEOs when he was appointed at the helm of Credit Suisse in May 2007 and, having survived the credit crunch so far, now looks experienced as many of his former Wall Street colleagues have fallen by the wayside. He has been with Credit Suisse for 18 years.
As a former head of Credit Suisse's investment banking arm Dougan can use his detailed knowledge of the industry to steer his group through the troubled waters of the credit crisis.
The U.S. banker, who does not speak German and has a more global profile than Kurer having worked in Japan and Europe, does not fit the bill of the traditional Swiss banker.
The 59-year-old Kurer, who has earned his name as a M&A lawyer in Switzerland, took over in April from disgraced all-powerful ex-chairman Marcel Ospel.
He has taken on the immense task of leading the bank at its most difficult hour but could be the right man to take UBS back to "boring," but solid ground.
"We must fully restore our reputation as quickly as possible," Kurer told the thousands of UBS shareholders at an October 2 meeting that was meant to kick-start the bank's brand rebuilding exercise.
"We will work hard and with humility. First and foremost, we need to perform solidly again," he said.
(Editing by Sharon Lindores)
