UBS chief executive Oswald Gruebel said he has the support of his board despite the rogue trading scandal that cost the Swiss bank $2.3 billion and prompted calls for tougher regulation of risky investment bank practices.

Arriving in Singapore for meetings with the bank's management and board, Gruebel laughed when asked by Reuters at his hotel on Wednesday if he still had the board's backing and said, Yes. Always.

Gruebel is expected to ask UBS's board to back plans for a radical overhaul of investment banking under his leadership at the meetings in Singapore, a plan sources said would be sped up after the trading scandal.

London-based UBS trader Kweku Adoboli was charged on Friday with fraud and false accounting dating back to 2008 relating to the losses.

UBS said Adoboi concealed unauthorised speculative trading in equity index futures over the last three months by creating fictitious hedging positions in internal systems.

Gruebel said on Sunday he would bear the consequences of the trading loss that was discovered last week but did not want to quit, adding the affair would influence the future strategy of the investment bank.

The board's chairman, Kaspar Villiger, signaled he was not panicked by the scandal. Speaking in French to television reporters outside the Swiss bank's Singapore offices, Villiger denied the bank was feeling the pressure from its shareholders, and said it was very solid.

The bank's executive board was meeting on Wednesday at their main offices in the city's business district before its wider set of board members gather later in the week.

The meeting is one of the four held every year and strategic changes to the investment bank are on the agenda, said several sources with direct knowledge of the plans.

It coincides with Singapore hosting the Formula One Grand Prix, of which UBS is a major sponsor.

OVERHAUL EXPECTED

UBS shares shook off early losses and rose 1.3 percent on Wednesday, compared with a 0.2 percent drop for the FTSEurofirst index <.FTEU3> of top European shares. The stock has plunged more than 80 percent from its 2007 peak.

UBS is under pressure to scale down, ring-fence or even split off its risky investment banking business from its core wealth management unit in order to shield private clients.

But a source at the bank told Reuters that the board will not be rushed into dumping the investment bank following the rogue trades.

The bank was widely expected to speed up an overhaul of its investment bank that had been planned for announcement at an investor day on Nov 17, though big shareholders have signaled they could wait until that date while the bank completes an internal investigation, another source at the bank said.

Gruebel was expected to scale back proprietary trading and fixed income, but not do away with them completely.

Politicians in Switzerland and Britain have renewed calls to separate riskier investment banking businesses from commercial bank operations.

The trading loss is a heavy blow to the reputation of Switzerland's biggest bank, which had just started to rebound after its near collapse during the financial crisis and a damaging U.S. investigation into its aiding wealthy Americans to dodge taxes.

Our near-term concern is the impact the recent turmoil will have on customer confidence in Wealth Management, which had been staging a gradual recovery in recent quarters, broker Collins Stewart said in a note.

UBS's largest shareholder, Singapore sovereign wealth fund GIC, met with the bank's management on Tuesday and said it had expressed its disappointment at the case. It urged them to take firm action to restore confidence and wanted details of how the bank would tighten its risk controls.

GIC, which has a 6.4 percent stake in UBS and has lost about 77 percent of its 11 billion Swiss franc ($12.4 billion)investment, added though that its view of the bank as well-capitalised remained unchanged.

UK and Swiss regulators have launched a joint probe into why the bank's risk unit failed to detect the trades and assess the overall strength of their trading controls. ($1 = 0.885 Swiss Francs)

(Additional reporting by Saeed Azhar and Simon Webb; Writing by Rachel Armstrong; Editing by Kim Coghill and Lincoln Feast)

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