Pick of Hamers for Next UBS CEO Unsettles Some Top Executives
(Bloomberg) –UBS Group AG senior executives were blindsided, and some bitterly disappointed, by Chairman Axel Weber’s selection of ING Group NV’s Ralph Hamers as the Swiss bank’s next chief.
The reactions from inside the world’s biggest wealth manager underscores just how unexpected the selection was and how abruptly a 15-month search closed with little warning a few minutes before midnight Wednesday in Zurich. Weber himself acknowledged some of the bewilderment.
“I hear from many clients, they have questions around the process, but I have not received any feedback that was outright negative,” the chairman said in a Bloomberg TV interview.
Questions surrounding the successor to longtime CEO Sergio Ermotti were about more than just timing. Not only does the ING veteran have limited experience in wealth management and investment banking, UBS’s core businesses, but he’s been vilified at home in the Netherlands over a money-laundering scandal.
Weber said the questions surrounding the scandal have been answered. Hamers was cleared both by Swiss regulators and the UBS board, he noted. While ING paid a $900 million fine and received a slap from the Dutch central bank, Hamers didn’t have any personal involvement in wrongdoing, Weber told reporters.
Hamers first became a serious contender for the role after the breakdown in conversations with another possible future CEO, Bank of America Corp.’s Christian Meissner. In March, Bloomberg reported that the discussions had fizzled between the U.S. lender’s former investment bank head and UBS. That’s when talks with Hamers deepened, according to a person familiar with the matter. Weber and Hamers know each other through their board seats at Institute of International Finance, a global lobby group for the industry chaired by Weber.
Weber was impressed with Hamers’s reputation for being ahead of the curve in digital banking, especially as UBS — like many banks — faces the challenge of overhauling its tech infrastructure so it can serve its sprawling network of clients better.
“Ralph is an excellent banker, and has led ING’s digital journey well,” said Piyush Gupta, CEO of DBS Group Holdings Ltd., who leads Southeast Asia’s largest lender and is also a member of the Institute of International Finance.
Hamers was an early advocate of digitization and the embrace of internet-based technologies. In his seven years atop ING, Hamers invested hundreds of millions of euros to change the way its 39 million customers worldwide access and manage their money.
Hamers has even mused that a bank may not need a balance sheet at all to serve its clients — it could simply be an online marketplace for financial products. Unlike skeptics who dismissed the rush to new technologies as a bubble, Hamers has said digitization offers banks their best path to prosperity in an era of negative interest rates and anemic economic growth.
“People don’t have time these days, and even if they did, they don’t want to spend it on banking,” he said in a 2017 podcast.
That kind of talk has UBS wealth managers worried that Hamers — who’s known for eschewing Savile Row suits in favor of jeans and sneakers — lacks the touch to deal with them and their super-rich clients, according to people familiar with the matter. His advocates eschew such concerns, pointing to his global experience, notably in China.
“Ralph is a devil-tested, charismatic executive with the experience and personality to successfully write UBS’s next chapter,” said Weber.
As he prepares to take over the reins at UBS, Hamers told colleagues that he’ll retain a soft spot for the institution where he spent 29 years. In a farewell call with senior executives late Wednesday, he said “his heart will continue to be orange” — ING’s logo color — according to a person familiar with the matter.
It’s not like UBS didn’t have any internal candidates to turn to for the top job. Ermotti undertook a radical overhaul of the top ranks in August. After a year marred by huge legal fines, questions about succession and a deepening slump in the share price, Ermotti recruited Khan and elevated some key executives, including Keller-Busse as EMEA president.
Khan, who joined from Credit Suisse Group AG was widely seen as an eventual contender for the CEO role. But Khan’s public feud with former Credit Suisse CEO Thiam — which became tabloid fodder in Zurich — undermined his standing with UBS board members, according to people familiar with the matter. Tensions between the two men erupted in an altercation at a party at Thiam’s house in January 2019.
Keller-Busse, one of the few women in a top role at the Swiss bank, was viewed as not having enough experience running one of UBS’s major divisions, the people said.
Leadership questions have roiled UBS since 2018 after former investment-banking chief Andrea Orcel quit to take the top job at Banco Santander SA (his move derailed when UBS took a hard line on paying his deferred bonuses). Potential chiefs Juerg Zeltner and Martin Blessing also exited.
Weber, a former German central banker who has been UBS chairman since 2012, stoked speculation a year ago when he addressed the topic publicly. “The CEO and I are in our eighth year at the bank,” Weber said in a January 2019 Bloomberg TV interview. “That’s a point in time where you need to start thinking about what is it you’re going to do and how you’re going to pass the bank over to your successors — I’m deliberately talking plural — and in what sequence you do that. We’re at the very early stage of those discussions.”
Even with the CEO job settled, another UBS succession issue looms. Appearing with Weber and Hamers at a Thursday morning press briefing, Ermotti, said he won’t necessarily be done at UBS after his resignation. One insider noted that will only fuel talk he may seek the chairmanship after Weber goes.