UBS is making the best of a tough situation. It has given interim CEO Sergio Ermotti the job on a permanent basis and is bringing forward the appointment of Axel Weber as chairman by a year. Neither man has direct experience for the job he is now taking on, and each has much to prove. But with the Swiss lender about to unveil its new strategy, it’s good to have the top team in place.
Ermotti has many qualities. He is urbane, multilingual and more emollient than his predecessor. But he has not run a major bank. Had Ossie Gruebel not resigned suddenly after September’s 2 billion Swiss franc rogue trading scandal, UBS would have had been able to consider a broader range of potential successors. Royal Bank of Scotland boss Stephen Hester, former JPMorgan executive Bill Winters and Josef Ackermann, Deutsche Bank’s outgoing CEO, might have been credible contenders.
Indeed, Ackermann may now regret standing for the chairmanship of Deutsche. Shareholder resistance forced him to withdraw his candidacy on Nov. 14, but the decision to stand probably took him out of the frame. With time of the essence and Ermotti’s Swiss passport a key advantage, there were no other credible challengers.
Weber’s elevation is also a mixed blessing. For all his undoubted brainpower and regulatory expertise, the former Bundesbank chief has never worked at a commercial bank. That’s why outgoing chairman Kasper Villiger had originally planned a year-long handover period.
But right now UBS doesn’t have time to conduct an extensive CEO search, or train up its rookie chairman. New capital rules and euro zone turbulence forced the group to abandon its profit target in the summer. September’s rogue trading scandal further tested the patience of investors and Swiss politicians. While the outlines of the new strategy are clear – a core wealth management business, supported by a smaller, less risky investment bank – Ermotti and Weber have their work cut out presenting and implementing it without facing questions over who’s running the show.