UBS ended its days as an investment banking powerhouse yesterday when the chief executive told an angry annual meeting that he would reassess the group’s wholesale business.

About 4,000 UBS investors gathered in Basle to hear Switzerland’s largest bank issue yet another mea culpa for its multibillion-dollar losses. Marcel Rohner told the meeting that the group’s investment banking business, which was responsible for most of UBS’s $37.4 billion sub-prime writedowns, would be slashed in size.

“We no longer aim to offer everything to everyone,” he said. “We don’t need an oversized balance sheet. We don’t need an oversized investor of trading portfolios. And we don’t need an unnecessary concentration of risk.”

He said that investment bank would no longer be subsidised by UBS’s successful wealth management business but would have to generate its own capital.

Olivant, the activist shareholder, said that it feared that an indiscriminate downsizing of the investment bank would bring investors’ further pain. “[This] may damage its market-leading franchises, with unnecessary loss of significant shareholder value,” the fund manager said.

Mr Rohner admitted that the credit- related writedowns taken by the bank had been a disaster. “It’s eroded a great deal of trust,” he said. “The far-reaching consequences of our misjudgment have already taken hold and we cannot turn back the clock.” He told investors that UBS could incur further losses on its credit-market investments.

In a report released on Monday into the blunders that led the bank to its $37.4 billion writedowns, UBS said that the investment bank had used poor risk management, an inappropriate bonus structure and was imprudent in the way it had set up Dillon Read Capital Management, its hedge fund business.

Just over 87 per cent of shareholders voted yesterday to elect Peter Kurer, UBS’s general counsel, as the bank’s new chairman, despite criticism that the lawyer was ill-suited for the role. He will replace Marcel Ospel, who had overseen the Swiss bank’s aggressive push into investment banking and was forced to resign over its decision to plough billions of dollars into US sub-prime mortgages.

Mr Kurer told the meeting that he would not defend his appointment but he insisted that he was aware of the magnitude of work required to get UBS back on track.

More than 97 per cent of shareholders approved a SwFr15 billion (£7.45 billion) rights issue — the bank’s second capital-raising in six months — but used yesterday’s meeting to call for further management changes. One investor told the board: “Thanks to your non-existent risk management policy, you almost sunk this ship . . . Now it’s time to get a new crew.”

Olivant said it was worried that the bank’s supervisory board continued to be led by insiders who had overseen the bank’s original losses.

“We remain concerned that UBS underestimates the complexity of the challenges it faces, given the limited strategic knowledge and risk experience of the supervisory board,” the fund manager said.

Times Recommends

• Gazprom brands Ukraine 'a barbarian' in gas row
• Services sector raises fears over UK jobless
• Retailers surge as profits survive sales plunge