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UBS yesterday confirmed Sergio Ermotti as its group chief executive officer and announced that Axel Weber would succeed Kaspar Villiger as chairman of the board in 2012.
Ermotti’s appointment seals a position he has held since he was appointed interim group CEO of UBS in late September when Oswald Gruebel tendered his resignation in the aftermath of the $2.3 billion loss by a rogue trader. At the time of his interim appointment UBS had said it would complete a comprehensive evaluation process that would take up to six months and then announce the new group CEO.
Ermotti’s appointment puts someone with less than six months’ experience at UBS in the top job. Ermotti joined UBS in April from Italian bank UniCredit, where he was deputy chief executive. He started his career at Merrill Lynch and was co-head of global equity markets when he left.
Weber is a former president of the Deutsche Bundesbank and was a member of the governing council of the European Central Bank. He was initially due to be appointed vice-chairman of the board next year and then take over as chairman in 2013. Instead, he will now step directly into the chairman’s role as current chairman Kaspar Villiger has decided not to stand for re-election next year. Villiger said in a written statement that he felt it was time to accelerate the leadership change at UBS to bring “essential stability and clarity to UBS” to master the many current economic challenges and regulatory changes the Swiss bank is facing.
The party line from Ermotti once again emphasised what has been stated time and again since the trading loss: that UBS will focus more on its wealth management businesses and on its home market, Switzerland. A focused, less complex and less capital-intensive investment bank and asset management business are also key elements for growing its wealth management franchise, he added.
Specialists had a mixed reaction to the speed with which Ermotti has been appointed. Some said it was necessary to formalise his position to enable him to make the changes needed for UBS to execute its strategy of enhancing focus on the private banking business. Others said few candidates would have been willing to take the top job at UBS in the current environment. Carsten Kengeter, who heads the investment bank at UBS, was at one stage reckoned to be the leading candidate to succeed Gruebel. However, the problems the investment bank has faced, capped by the trading loss, changed this.
