The activist investment firm Olivant has raised its stake in Swiss bank UBS to 2.5 per cent and backed its recent rights issue, but says there is still an urgent need to clarify strategy, according to media reports.

Olivant, headed by former UBS chief executive Luqman Arnold, said that by taking a stake worth about $1.8 billion it was "demonstrating its belief in the potential restoration of shareholder value achievable through decisive action on the part of the UBS board".

The boutique investment group in April called on UBS to reform and consider splitting up after the bank was hit by massive losses linked to the credit crunch. Mr Arnold proposed selling off asset management and the investment banking arm, reducing the group to its wealth management rump.

Olivant held a 1.1 per cent stake two months ago and has gradually bought more shares.

Olivant said in a statement there remained an urgent need to clarify future strategy to allow UBS to attract and retain talented bankers.

Meanwhile, clients of UBS have probably pulled out a net SFr41 billion ($39.3 billion) in the second quarter of this year, say JP Morgan analysts, according to Bloomberg.

"UBS remains a building site,'' London-based JPMorgan analysts were quoted by the news service as saying in a note to investors. They also predicted an additional SFr5 billion of asset write-downs at Zurich-based UBS this year.

Clients of UBS, which oversees SFr2.76 trillion, removed a net SFr12.8 billion in the first quarter, the first outflow in almost eight years.