"Reputation is fundamentally important to all banks but especially so at UBS," said Fiona Swaffield, an analyst at RBC Capital Markets in London. "The bulk of the share price is thanks to the wealth management unit."

UBS shares have rebounded to 11.47 francs, after slumping 11 percent to 9.75 francs on the day the bank disclosed the loss. The stock is down 25 percent this year, compared with a 29 percent decline in the 46-member Bloomberg Europe Banks and Financial Services Index.

Sergio Ermotti, 51, the bank's European head and a former derivatives banker, was appointed as interim CEO to replace Gruebel, 67.

Now may be the time to rebuild UBS around its private banking business, said Beat Wittmann, head of Zurich-based Dynapartners and former chief of investment products at Julius Baer Group AG. Spinning off the investment bank or devoting it to supporting the wealth-management business could boost the shares by as much as 50 percent, he said.

"It will not be enough for the board to tell stories about improving risk management," said Wittmann. "They need to spin off and list the investment bank separately and nominate a chief executive officer from a wealth management background."

UBS oversaw $1.56 trillion for wealthy investors at the end of last year, compared with $1.95 trillion at Charlotte, North Carolina-based Bank of America and $1.63 trillion at New York- based Morgan Stanley, according to a survey by Scorpio Partnership, a London-based provider of research and industry analysis.

The investment bank will "carry less risk" in future and be more closely aligned with the wealth management business that will be further expanded, Chairman Kaspar Villiger, 70, said on Sept. 24 after Gruebel quit.

UBS is "committed" to developing its wealth management Americas business, according to a memo from Villiger and Ermotti to employees that they said was in response to persistent "rumors."

'Remain Unscathed'

"While the event may cause reputational damage in the short term, the core wealth management franchise is likely to remain unscathed," Teresa Nielsen, an analyst at Vontobel Holding AG in Zurich with a buy rating on UBS, wrote in a note to clients.