Luqman Arnold is understood to have built up an 0.7 per cent stake in UBS, in a bid to push through a break up of the struggling Swiss bank. A former chief executive of UBS, Mr Arnold has been aquiring his shares, worth $450 million (£226 million), through Olivant, his London investment firm.

It is thought that he is also pushing for the separation of the bank’s investment and private banking arms and the sale of its asset management division. His proposals are detailed in a letter sent to Sergio Marchionne, the UBS chairman and recommend drastic changes to the the bank’s board.

Mr Arnold’s activist campaign follows the announced resignation of Marcel Ospel, UBS’s chairman, earlier this week. Mr Ospel said that he was quitting as he revealed that losses had more than doubled to $37 billion (£18.6 billion). Mr Arnold, who recently led a failed rescue bid for Northern Rock, left UBS in December 2001 due to “differences of opinion,” between him and the board.

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