SINGAPORE (Reuters) - In the lobby of Singapore's One Raffles Quay office tower, excited onlookers queue for a chance to sit in UBS AG's sleek Formula One car simulator.
Staff in T-shirts emblazoned with the Swiss bank's logo give tips on how to navigate the track that drivers Lewis Hamilton and Sebastian Vettel will roar around at Sunday's Formula One race in Singapore -- a glitzy, annual event sponsored this year by UBS.
The laughter echoing in the lobby was in stark contrast to the mood in the building's upper floors, where a chastened UBS board huddled to consider last week's fallout from $2.3 billion (1.4 billion pounds) in losses racked up by a London-based trader through a series of unauthorized trades.
Until a week ago, the bank's plan to hold its September board meeting in Singapore seemed ideal, a chance to iron out strategy followed by a weekend of entertaining clients at one of the flashiest events on the calendar for wealthy Singapore.
Now the garish party tents and UBS-sponsored festivities of the Singapore Grand Prix seem jarringly out of place for those at the helm of the global bank, many of whom entered through the drab surroundings of the tower's loading bay to avoid packs of waiting reporters.
There was a similar disconnect in the United States, where UBS bankers relaxed in style with clients at the storied Pebble Beach resort in California.
Projecting an image of austerity at the Singapore Grand Prix is not easy, especially with the board staying at the Ritz-Carlton, Millennia Hotel in Singapore, one of the priciest hotels in one of Asia's most expensive cities.
One executive pointed out on Wednesday that plane and hotel tickets for the Singapore event were booked well in advance of the trading scandal. Any effort to scale back lodging and flight plans would have come too late.
With a bird's-eye view of the racetrack, a three-night stay at the Ritz this weekend -- complete with Formula One tickets -- costs a minimum of S$6,000 ($4,700) for corporate clients. A receptionist told Reuters a night in one of their top suites goes for as much as S$17,000 before tax.
Adding to the awkward balance is the fact that this week's events take place in the hometown of UBS's largest shareholder, Singapore sovereign wealth fund GIC. The fund issued a rare, public statement this week aimed at UBS, demanding the bank take firm action to restore confidence.
Traders in Singapore said UBS had also booked a hospitality lounge in the city-state's famous Raffles Hotel for three days, but UBS declined to confirm the booking.
UBS became a global sponsor of Formula One in August last year just after rival Royal Bank of Scotland cut its marketing ties with the sport in order to lower costs.
The bank never disclosed the financial terms of the agreement. But marketing experts at the time said it was likely to cost tens of millions of dollars every year.
Chief Executive Oswald Gruebel, known to be a big motor-racing fan, oversaw the deal, their first major international sponsoring initiative for several years. The bank said in its press release that the tie-up provided "fascinating opportunities for key client hospitality across the globe."
The website for the Singapore Grand Prix says all corporate hospitality guests will enjoy "an international five-star menu, extensive wine selection" and "breathtaking views from our exclusive balconies, terraces and private grandstands."
The Pebble Beach resort where UBS is holding its client conference has hosted the U.S. Open golf championship five times. A source familiar with the matter said the bank has held the conference for the past 10 years.
Hotel rooms at the resort start at $615 a night, according to its website.
UBS has been having problems beyond rogue traders in the United States, where it is working to stem the flow of high-profile departures from the investment bank, like Cary Kochman and Liam Beere, the global co-heads of mergers and acquisitions, who left in June.
It is cutting back its investment banking division worldwide by 5 to 10 percent as part of previously announced job cuts, several UBS bankers told Reuters on Thursday.
UBS said it was unable to comment on the cost of its F1 sponsorship but that it continues to "remain vigilant on costs."
"F1 is a long-term sponsorship platform which constitutes a key element of our branding activities," said a UBS spokeswoman in Singapore. She added the bank also uses the event as a platform for a number of charity projects.
Singapore banks often use the event to entertain clients. One fund manager told Reuters he was invited to a party at Goldman Sachs' offices overlooking part of the track.
But UBS has a tricky task of acknowledging the gravity of their situation while ensuring their clients have a good time.
UBS' staff and clients are also enjoying F1-related perks: Employees in their Singapore office told Reuters they have all been given a free red-and-black Formula One jacket.
What is crucial, public relations experts say, is that senior executives at the bank demonstrate they are in control.
"In many situations, companies can fall into the vacuum of speculation and misperception," said Ang Shih-Huei, Asia managing director at Pelham Bell Pottinger, which advises executives, financial institutions and some governments.
"In these times, it is important to show solidarity of the firm both to internal and external stakeholders and to respond swiftly with a clear plan of action in order to restore confidence."