Triumvirate to manage UBS
An era ends with the departure of UBS Chairman Axel Weber. Switzerland’s largest bank should have three strong leaders at its helm.
Can anyone remember that Tarantino moment with Sergio Ermotti and Axel Weber? While walking the halls of UBS for the 2016 “We Are UBS” image campaign? (picture below). Shoulder to shoulder in dark suits. Only two pairs of “Reservoir Dogs” sunglasses from the cult Hollywood gangster film were missing.
Weber’s resignation from the board after a decade as chairman at the April 6 AGM puts a definitive end to the “Webermotti” era.
(Picture: Youtube extract)
Weber also likely takes with him the bank’s outgoing pride in having one of the most successful business models in the wealth management industry. As if that was even necessary with the US$100 billion in net new funds the bank withdrew in 2021.
Colm Kelleher (image just below) should be elected to replace Weber. But doubt there is a ‘Kellehamers’ with the CEO Ralph Hammer anytime in the near future (middle picture).
Indeed, UBS is likely to be managed by a triumvirate. Sources indicate vice president designate Lukas Gahwiler will form the third leg of the expected trio at the head of the largest private bank in the world.
The plan is for each of them to have clearly defined areas of influence in order to prevent the relationship from deteriorating between them, as seemed to be the case with Ermotti-Weber in 2019.
better than thought
On one side is Kelleher, the president. A Wall Street banker who spent three decades with Morgan Stanley and had all of his operations under him at one point. His candidacy was a surprise in November but he’s a better fit for UBS than first thought on closer examination.
Of all the major US banks, Morgan Stanley is the strongest in wealth management. The United States is the most important market for UBS in terms of invested assets and Kelleher knows all the ins and outs of the market by heart. And his vast network of contacts also opens up prospects for the Asian markets, another area of interest for the bank.
All about digitization
Growth and operational activity. That will be Kelleher’s skill, giving CEO Hamer carte blanche to digitally transform the bank and change the way employees work. By the end of 2022, approximately 20,000 of them should work according to the “agile” method.
Hamer will also focus on sustainability. It’s not as tangible as bits and bytes, but Hamer has set concrete goals for the bank in this regard. By 2025, approximately $400 billion is expected to be invested in sustainability and impact criteria.
Then we have Gähwiler. He was also proposed in November as guarantor of “Swissness” in the management of UBS. But many observers believe Gähwiler is more than some kind of alibi alongside Kelleher and Hamers.
He brings an extensive network of national contacts through his positions at Digitalswitzerland, several banking associations as well as directorships at Ringier media and Pilatus Aircraft. He will assume all the Swiss functions and positions that Weber leaves behind.
The 56-year-old knows the Swiss market. He was convinced by the CEO of UBS Oswald Gruebel to move to UBS from rival Credit Suisse in 2010, where he managed domestic affairs until 2016. Since then he has chaired the Swiss entity. His intimate knowledge of the inner workings will stand him in good stead given Hamer’s plans to heavily digitize the business over the next few years.
Revolutionary American Agreement
It is also the direction in which the whole bank is heading. UBS is striving for strong growth in its core wealth management business while trying to expand its reach to new clients using digital channels.
One of the key deals is the takeover of robo-advisor Wealth Front in the United States. He wants to use fintech to reach a younger segment of the market, not yet very wealthy.
Apparently, according to some, Kelleher, Hamers and Gähwiler met several times to get to know each other. But it doesn’t kick off until April 6, when shareholders vote for chairman and vice-chairman. At that point, it will begin to be known if they are pulling in the same direction or if sparks start flying like an awkward threesome. .