SWITZERLAND - Swiss pension fund Profond has sold its shares in Swiss bank UBS citing "mistrust" in the new management, just months after arguing smaller shareholders should be allowed to invest in the firm.

The crisis-ridden bank has sustained severe losses with its subprime investment over recent months and recently announced major changes to its management with legal counsel Peter Kurer taking over as chairman of the board as a result. (See earlier IPE story: Kurer swaps law for the UBS chair)

But Profond head Herbert Brändli says in a statement on his website Kurer "is not the man the bank needs" so the pension fund has now sold shares in UBS.

"Accountants and lawyers have no place in the management of a bank. And Kurer is part of the system. He helped making the decisions to turn the bank into what it is today," claimed Brändli.

Because of "mistrust in the new management", Profond has sold its 2.3 million shares in UBS and did not take part in the bank's capital hike via a right issue which it had fought for. (See earlier IPE story: Ethos and Profund fail with UBS motions)

However, other Pensionskassen are less pessimistic about the bank which has a major position in Swiss indices.

"I am not optimistic but I am confident that the bank can stabilise itself on a very low level," said Hans-Peter Wiedmer, CFO of the CHF8bn Bernische Pensionskasse.

"We are careful but under the current circumstances I think an underweight position in UBS is prudent in order to be able to participate should the bank start to develop more positively again."

The Bernische Pensionskasse increased its holdings in UBS during the rights issue by 1.5 million shares so now holding 4.5 million shares - roughly 1% of the fund's total assets.

UBS noted in a statement it has now completed the rights offer, issuing over 760 million new shares in the proess.

The bank said 99.4% of shareholders exercised their subscription rights on these shares so those not taken up were sold in an open market transaction on Friday.

In other news, UBS and Credit Suisse have now settled all actions filed by companies of the Parmalat Group agreeing by agreeing to payments but without admitting about liability of guilt.

Both Swiss banks had been accused of not having done enough to prevent the Italian dairy manufacturer's bankruptcy in 2003.

UBS will pay a total of €185m for various claims in connection with the company's break-down.

Credit Suisse confirmed it will pay €172.5m and keep the shares it received during the insolvency proceedings.

The bank stressed it had "always acted correctly" in its dealings with Parmalat and stressed agreeing to the payment was no admission of guilt.

Parmalat settled its longstanding dispute with UK pension company Hermes, only last month, which in turn had sued the dairy manufacturer following the bankcruptcy. (See earlier IPE story: Parmalat ends Hermes suit following fresh settlement)

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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