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Mr. Oswald J. Grübel
Chairman of the board of La Zagaleta Company,
former CEO of UBS Group and Credit Suisse
at his holiday residence at La Zagaleta, Spain
Edition 4


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The first non-Swiss CEO to head Credit Swiss in its 150 years of history gives us an insight into the key factors behind the current complex economic situation from his villa in La Zagaleta – “the place where I most like to think and relax”.

Mr. Grübel, we have seen enormous Market turbulences in the last months, when and how do you think the Financial Markets will return to more stability?

The volatile market conditions were created by the collapse of the highly leveraged finance system in the USA. The US Government has announced a 700 billion rescue package which should help the banking system and the faltering economy. Unfortunately it will lead to a much weaker US Dollar in the future after the repatriation of capital is finished. The market volatility will only subside when confidence in the banking system returns. In the last few weeks, Central Banks put more liquidity in the markets than ever, which will help the stock market in the coming months to rally.

Before becoming the CEO of Credit Suisse, you were the Groups head of Private Baking. How is the private wealth developing today?

The creation of private wealth has shifted to the emerging markets in the last few years, especially to countries which are energy and natural resources rich but also to countries which benefited from globalisation. The amounts of wealth creation in countries like Russia, Brazil, China, India and the Middle East has been astonishing. A considerable part of this wealth is looking to be reinvested in Europe and the USA.

Looking at the problems in the European real estate sector today, in countries like Spain, Ireland, United Kingdom and France, how many years could this decline last?

I think we will see a dichotomy developing in real estate. The high quality and therefore also high priced sector, will continue to be in demand since it is less dependant on financing, but the low quality, cheap housing which has been financed with mortgages, often 100 per cent, will take a few years to recover. The main reason is that banks have to rebuild their capital base and therefore will be restrictive in lending money.

As CEO of Credit Suisse you got a reputation as a pragmatic, hard and realistic person that managed the turnaround of the Group from the last financial crisis to record profitability and gained you great respect in the financial industry. What can you tell us about this time?

If you want to be successful as CEO, you have to understand your company and the business it is in very well because only then will the employees support you. But running a company also means that you must understand the market it operates in and how the market is changing. Any decision you make is about the future and therefore it could turn out to be wrong, when you notice that, you must not be afraid to change it immediately. I also believe that responsibility is not dividable, you either take it or you don’t.

You retired in May last year, since then Banks all over the world got in problems and their shares collapsed. When do you think is the time to start buying these stocks?
We are in the middle of a deleveraging process or you can also call it a credit- contraction and it will most likely go on for quite some time. The central banks have to provide financing for the non existent interbank market at present and very little trust is left between banks. Regulators will ask for higher capital margins which will depress profitability, therefore I think that bank stocks are not necessarily cheap.

How did you get to know La Zagaleta and what makes you spend a large part of yout time here?

My first visit to La Zagaleta was around ten years ago and I fell immediately in love with it and decided to build a house here. At first I thought more of it as a place to retire, but soon I could not resist its Andalucian charm and the wonderful climate. Today it is my favourite place to work from and relax.

From the moment of the interview, Mr. Grübel has since stepped down as CEO of UBS.



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