Speaking before 4,200 shareholders in Basel, Switzerland, Chief Executive Officer Marcel Rohner said the bank would look to reduce expenses, particularly in its investment banking division.

First created in 1998, the bank’s securities division has earned $32.48 billion (32.5 billion francs) since its inception. That figure has now been completely offset by the $37.5 billion (38 billion) in losses the unit has incurred since the subprime crisis began to unfold last summer.

UBS will “no longer aim to offer everything to everyone in investment banking,” Rohner said. The bank would announce job cuts at the unit next month in order to make expenses more compatible with the securities unit’s “new positioning,” he said.

In addition to cost-cutting measures, shareholders approved another capital infusion of $15 billion. That’s on top of the $13 billion already raised from sovereign wealth funds in Singapore and the Middle East.

Ospel Ousted

UBS shareholders booed the selection of General Counsel Peter Kurer as the replacement for former Chairman of the Board Marcel Ospel.

Ospel, 58, who started his financial career in securities trading at Merrill Lynch & Co. Inc. (MER) has been lambasted in the Swiss press for overexposing UBS to the U.S. subprime crisis. UBS losses are the largest of any foreign bank.

And while most were pleased to see Ospel replaced, many objected to the selection of Kurer, 58, as his replacement.

“We have heard no justification as to why a credible search for an external chairman has not been undertaken,” former UBS President Luqman Arnold, whose London-based investment group currently holds 1.1% of UBS shares outstanding, said in an e-mailed statement, Bloomberg News reported. “We are skeptical whether a supervisory board led by legacy insiders will be the agent of change that UBS needs.”

There had been some speculation that Germany-based Deutsche Bank AG (DB) Chief Executive Officer Josef Ackermann might be tapped for the role, as he is a Switzerland native and is seen as having the experience needed to helm a large banking operation facing the type of risk management issues that UBS is confronting.

“At least half of the board should be made up of banking experts,” Dominique Biedermann, director of Geneva-based Ethos, who has been very critical of UBS management, said yesterday.

In an attempt to reassure discontent shareholders, Kurer affirmed that UBS is not for sale while acknowledging the monumental task before him.

“I am not here to defend the choice” of the board, Kurer told shareholders. “It is an honor for me to stand in front of you today, but I do so fully aware of the magnitude of the tasks ahead of us, of the work that is required to bring UBS back to the premier ranks of banking.”

UBS shares traded on the New York Stock Exchange dropped 2.6% for the day, with a decline of $0.92 to close at $34.46. Shares have traded in a range from $22.19 to $66.26 in the past 52 weeks.