UBS was forced to rush through the appointment of its new chief executive after a botched bond deal at Dutch bank ING Group, catching a number of potential internal successors to Sergio Ermotti off guard.
It is the latest example of clumsy succession planning by one of Europe’s largest banking groups, following recent sagas at Santander and Credit Suisse and the still-vacant seat at the top of HSBC.
UBS brought forward its announcement that ING boss Ralph Hamers will succeed Ermotti as chief executive to 10.45pm last night, following pressure from the Dutch bank, according to people familiar with the matter.
Earlier on 19 February, ING had pulled a $1bn AT1 bond without giving specific reasons for doing so. The confusion prompted speculation about the reasons, sending ING’s stock down by around 4.5% over the day. After several hours of silence following market close, ING released a statement revealing Hamers was leaving for UBS. At the same time, UBS issued a similar statement.
The timing meant some internal candidates to replace Ermotti only realised UBS would be appointing an external candidate shortly before the late-night release — something that caused consternation among some in UBS’s senior ranks, one person said.
Another person familiar with the matter said all relevant parties had been informed. ING has yet to announce a replacement for Hamers, who has spent almost 30 years at the bank.
UBS began searching for a new chief executive 15 months ago and was engaged in a “rigorous selection process that included internal and external candidates”, according to a memo sent to staff by chair Axel Weber in the early hours of Thursday morning.
Hamers will replace Ermotti on 1 November.
Swiss banker Ermotti has led UBS for almost a decade. He took over in the immediate aftermath of a $2.3bn rogue-trading scandal and quickly set about reshaping the institution by streamlining its investment bank and focusing on wealth management. In a message to staff on 20 February, Ermotti said UBS had “restored pride among those working here”.
However, analysts have already questioned whether the appointment of Hamers, who has spent much of his career in retail banking, will mean a further pullback from investment banking activities. In response to questions from journalists on Thursday, Weber said: “This is a CEO change, not a strategy change.”
Ermotti’s resignation signals more change at the top of Europe’s banking industry, little of which has been without incident. This month, Tidjane Thiam, the chief executive of UBS’s domestic rival Credit Suisse, quit amid the fallout from a spying scandal.
In 2019, Santander scrapped its decision to hire the former UBS investment banker and long-time adviser Andrea Orcel as its next chief executive — a decision that prompted Orcel to take legal action. Meanwhile, HSBC continues to search for a permanent successor to John Flint, despite this week announcing a huge restructuring under interim boss Noel Quinn.
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