The chairman of UBS has a firm opinion about how to go about an eventual replacement of CEO. He also believes that a merger isn't currently on the cards.
UBS Chief Executive Sergio Ermotti immediately after his investors' day in November bought shares worth about 13 million Swiss francs ($13.2 million) in the country's largest bank. It didn't help the stock price much though and the company has lost about third of its value in the full year 2018.
The difficulties that the company is facing in its attempt to boost the stock price has prompted speculation about the timing of the end of Ermotti's tenure and the possibility that he won't last for many more years. «Bloomberg» for instance reported in December that the board had started looking for a replacement candidate outside the bank.
Surprise Change as Worst Possible Option
Axel Weber, the chairman, however isn't going to be rushed into a change. He told Swiss daily «Tagesanzeiger» (behind paywall) that a replacement process wouldn't be completed overnight, because a surprise change of top executive always was the worst option for any company.
Selecting the right person was part and parcel of the board's routine activities, Weber, the former head of Germany's Bundesbank, said. UBS was not under pressure and Ermotti and himself had the same goal of making the bank as fit as possible before passing responsibility on to their successors.
Lack of Sparkle
The interview will pour cold water on speculation that the two top bankers will be depart any time soon. Weber, 61, confirmed his intention to remain chairman of UBS until 2022, providing that shareholders retained faith in his work.
But the share price of UBS is exactly the main factor which would suggest that investors may be running out of patience soon. The chosen strategy based on savings, investing, dividend payments and a solid return on investment has so far failed to give the stock a keenly awaited boost.
The Clock Is Ticking
It seems that Weber and Ermotti – «Webermotti» – will stick to their plan at all cost, even if the stock fails to bounce back. Weber also said that a merger with another bank would come too early, putting paid to speculation about a deal with Deutsche Bank.
The bank aims to primarily grow from within, Weber emphasized, adding that UBS wanted to walk safely before attempting to run. Makes sense, but the clock is ticking nevertheless.
