The CEO of Switzerland’s largest bank has grown fond of complaining. He is losing sight of what he can change, finews.com's Katharina Bart writes.
For nearly 40 minutes, UBS CEO Sergio Ermotti battered a packed hall of 300 Swiss bankers with a dizzying litany of statistics to underpin his complaints: too-big-to-fail draft law, for example, would cost the Swiss bank an extra roughly $60 million annually.
Let’s set aside the fact that the sum represents less than 0.3 percent of UBS’ annual spending (the tab was $24.2 billion last year). Ermotti is complaining about things that he cannot change – neither in Switzerland nor internationally.
He is focused on combating what he calls scare-mongering by financial regulators and central bankers. He would be well-advised to take Reinhold Niebuhr’s serenity prayer to heart: identifying what he can change and accepting what he cannot – and most importantly, knowing the difference.
Swiss Patriot
To his credit, Ermotti is a patriot through-and-through: his platform in winning the job back in 2011 was to restore luster to the Swiss bank’s tarnished image. His political coming-out in 2015 with a five-pillar campaign coincided with the successful three-year transformation of UBS as a dividend-rich wealth manager.
Ermotti wants to free UBS of the moral shackles of Switzerland’s 2008 bailout by taxpayers (after the bank recently cleared its 30 billion Swiss francs in crisis-era losses). His method? Poke, but never puncture: regulation needs to stop at current levels, he argues. Cantonal banks get an easy ride, he says. Switzerland’s central bank should think about reversing long-standing negative interest rates, he says.
Hefty Influence
By not offering up alternatives or making specific demands, Ermotti is never vulnerable. The reason? Ermotti is too focused on what he cannot control to devote himself to what he can. In fact, he has the influence to change a lot: UBS employs roughly one-fifth of the hefty Swiss banking sector’s staff.
Like Credit Suisse, UBS lobbies hard in Bern – often successfully. Last year, Nordea – the largest Nordic bank – left Sweden for Finland, mainly to avoid tougher rules. Ermotti has publicly flirted with the idea but will realize that ultimately Switzerland is still essential to UBS’ brand abroad.
Dance in the Rain
The art of being a CEO is as much of juggling the often disparate interests of clients, staff, regulators, and the media – which Ermotti has also grown fond of griping about – as it is coping with prevailing reality. The 21st century equivalent to Niebuhr’s prayer is by artist Vivian Greene: instead of waiting for the storm to pass, learn to dance in the rain.
Unlike Tidjane Thiam across the road at Credit Suisse, Ermotti enjoys enormous clout with the Swiss public. He is a talented and charismatic speaker, who is widely viewed as sincere in his concern for Switzerland and its financial center. If he genuinely believes that overreach in regulation is so central to UBS’ well-being, then he should make specific demands – and lobby for them.
Homemade Woes
His vague complaints aren’t going to help UBS, which is mired in homemade problems: a high-stakes French criminal trial, a share price that has languished against the backdrop of record highs in the broader Swiss market, and a fumbled start to Ermotti’s succession as CEO.
Instead, what is UBS squeezing out of its merged private bank? How much investment bank do ultra-rich clients need, and does UBS have it? Quo vadis asset management? How is UBS going to mesh fintech into its offering? All questions Ermotti can do a lot about – all likely to enliven his stagnant share price.
