The bank announced Kobler’s resignation on Tuesday, saying it would take immediate effect.
The 56-year-old was dragged into the public spotlight just before Christmas when his former lover, a Brazilian woman, lodged a criminal complaint against him for sexual assault.
The complaint was later withdrawn after the two sides reached an agreement through their lawyers but the controversy over Kobler’s extra-marital relationship took its toll after it was revealed that the pair had a child together.
“I have found in recent days and weeks that my private mistakes and the public response to the now withdrawn criminal proceedings have compromised my ability to work as the head of LUKB,” the executive said in a statement released on the bank’s website.
The controversy “has become a burden for the successful future of the bank,” Kobler said.
He said he regretted having to step down but that this was in the best interests of the bank.
Kobler will depart as of February 1st with a fixed salary for the year with no bonus and no severance payment, the bank said.
LUKB did not precisely indicate the pay Kobler is to get but he received total annual compensation of 480,000 francs in 2012, according to the latest annual report.
Despite the appearance that Kobler was forced by the board to step aside, the bank’s chairman Mark Bachmann called the decision “regrettable”.
“We regard the resignation as a sign of human greatness and as proof that Bernard Kobler, even in the current situation, is putting the welfare of the bank against his personal interests,” Bachmann said.
The bank’s chairman praised Kobler’s “excellent performance” as CEO and thanked him for his commitment, wishing him well for the future.
The bank’s board met before Christmas and acknowledged that while the controversy was “serious” it regarded the case as a personal matter that had no bearing on the CEO’s performance on the job.
However, at that time the board issued a statement saying that it would continue to monitor the situation to see what impact the affair would have on the bank.
Daniel Salzmann, the bank’s deputy CEO, will take over as interim CEO while the bank launches a recruitment process for a permanent replacement.
Majority-owned by the canton of Lucerne, LUKB employs around 1,000 people.