The choice of Heinz Huber as new head of Raiffeisen comes as a surprise – and it’s a signal that things are about to change at the headquarters of the Swiss cooperative bank.
Heinz Huber, the CEO of Thurgauer Kantonalbank (TKB), is taking over from Patrik Gisel as head of Raiffeisen Switzerland: Tuesday's announcement surprised observers, as most had expected an seasoned executive with big-bank experience and a well-known name in industry circles.
Huber, 54, is neither, but he nevertheless has plenty of experience to his name to qualify him for the top job at Raiffeisen. The appointment seems like a very public statement that the bank no longer wishes to employ flashy top executives.
A Perfect Choice for Growth
Things have changed over the past two decades. In 1999, the Raiffeisen management was looking to replace Felix Walker, the departing director general, with a person up to the task to move the cooperative bank into a new area. Former investment banker Pierin Vincenz (pictured below), a man full of ambition and drive, seemed the ideal choice.
Vincenz got his farmer bankers to move a tick faster. When he passed on the task in 2015, Raiffeisen was the best brand in Swiss banking, with newfound strength in Swiss cities. The bank had risen to become the biggest mortgage lender and it had diversified, adding Notenstein La Roche private bank and wealth management division Vescore to the fold.
Raiffeisen also had taken stakes in startups, investments that in the end led to the downfall of Vincenz: the much-feted star banker at the beginning of 2018 was taken into custody in Zurich and questioned for many weeks. He is still being investigated and Raiffeisen only just demanded money back that he presumably received in connection with a transaction.
Gisel’s Fate
Vincenz’ erstwhile deputy Patrik Gisel (pictured below) earlier this month departed as CEO after pressure had mounted due to his private connection with a former board member. He had already scaled back the Raiffeisen imperium built by Vincenz – Notenstein and Vescore have been taken over by Vontobel. But his style of leadership reminded too much of the Vincenz years, which made him an easy target.
Huber promises a entirely different type of leadership. While Vincenz managed to somehow lead the entire group as head of the centralized St. Gallen unit, Huber won’t enjoy the same type of clout. The 200 member banks have made it clear that they want a bigger say and that Raiffeisen Switzerland should return to being a service center above all else.
A Return to the Regions
It was Walker, the predecessor to Vincenz, who earlier this year emphasized that the regional units are the basis upon which Raiffeisen had been built and that more influence ought to be given to member banks.
Huber should be fine with such demands. At TKB, he got used to working under the auspices of the state. His strong IT background will also come in handy as the migration to the Avaloq banking platform has proved somewhat challenging. Also, Huber has helped list TKB on the stock exchange – valuable expertise should Raiffeisen decide to become a stock company as has been demanded by the regulator.
Mortgage Business in for Change
But his biggest challenge touches upon the core strength of Raiffeisen: the mortgage business. Raiffeisen has grown faster than the market over the past decade and today commands some 18 percent of the market.
Once interest rates in Switzerland start turning upwards again (from a current record low), the real estate market is in for some difficult times. Ratings agencies have long warned that this will hit Raiffeisen, and Huber may see his first task in applying the brakes to this key part of the bank's business.
