A manager of alleged UBS rogue trader Kweku Adoboli's told a court that he was shocked when he heard Adoboli had admitted to making a number of unauthorised deals which led to a $2.3bn (£1.4bn) loss to the Swiss bank where they worked.

UBS's London-based head of European cash trading, Ronald Greenidge, revealed that Adoboli said he had an opportunity to close the position in August at no cost to the bank just weeks before the losses emerged, but failed to take the appropriate action.

The day before Adoboli's arrest on September 15 last year, he sent an email to colleagues at the bank admitting he had made unauthorised deals and concealed UBS's exposure to losses by entering fake deals into the books.

Greenidge, who was Adoboli's line manager until April 2011, told Southwark Crown Court that he couldn't believe that 'someone I worked with for that length of time would do something like this'.

'From this email ... I thought it would be a number that would be manageable, the bank, if it were due, could absorb,' he told the court.

Greenidge said Adoboli told him the bank had exposure of $5bn on the U.S. S&P 500 stock index and $3.75bn on the German DAX.

'The question was how you could amass a position of that size without alarm bells going off,' Greenidge told the jury. 'He said he had booked fictitious trades to hide the exposure.'

At a second meeting later that night, Adoboli, in the presence of his lawyer, said he had been breaching his maximum trading limit and booking fictitious trades since October 2008, Greenidge told the court.

According to Greenidge, Adoboli said he had started to increase the size of the positions in June 2011 by betting the market would fall due the Greek vote on austerity measures. But the market rose.

The meeting heard that he then gambled on the market rising but it fell, and in September he predicted the market would fall but the reverse happened and it went up, said Greenidge.

Asked in the meeting whether others knew what he had been doing, Adoboli did not answer, Greenidge said.

Adoboli denies two charges of fraud by abuse of position and two of false accounting.

The case continues.