UBS boss Sergio Ermotti has taken his own succession in hand in an unhurried, unsurprising way. The only open question remaining is when Iqbal Khan gets to move into his office, finews.com's Peter Hody writes.
After eight years at the helm of the Swiss bank, Sergio Ermotti (pictured below) has done what UBS' board and shareholders have demanded for some time: he found room on his 13-person top management for a potential successor, and anointed a crown prince in the process.
(Image: Keystone)
The 59-year-old Swiss banker did it in his inimitable, confident way which speaks volumes. Without a single reference to succession, much less timing of his exit, Ermotti signaled the transition into the next phase of UBS' leadership in the most elegant way possible.
Stanching Criticism
Ibqal Khan's (pictured below) arrival at UBS is the culmination of a nine-month journey. Ermotti deftly waited until Khan had reached an exit deal with Credit Suisse, and waited to announce the new hire at UBS until both men had returned from summer holidays.
The new hire doesn't immediately address the question of how UBS can jumpstart growth at its private bank. However, it goes a long way to stanching criticism over the bank's languishing share price, lackluster results, or that Ermotti had failed to adequately build up a successor.
All Signs for Khan
UBS watchers will note with interest that operating chief Sabine Keller-Busse was given the same title that Ermotti himself held – briefly – before advancing to the CEO spot in the wake of the$2 billion Kweku Adoboli rogue trading scandal. She isn't likely to take the same glide path into the top spot that Ermotti did in 2011: Keller-Busse's candidacy won't get off the ground if she can't show responsibility for a profit-and-loss (thus far, she hasn't run an operational business at UBS).
Suni Harford (pictured below) is one the U.S.' most influential bankers, but her American citizenship and her distance from the financial corridors of power in Zurich – she will continue to be based in New York – will prevent her from rising further (if she even wants the top job at UBS).
Dings to Star Aura
To be clear: Khan will have to prove himself as co-head with Tom Naratil of the wealth unit to inherit Ermotti's job. Naratil, a UBS veteran who did a five-year stint in Zurich as finance chief under Oswald Gruebel and then Ermotti, is a «political animal» who knows the Swiss bank inside out.
Khan will also have to deal with Joe Stadler and Christine Novakovic (pictured below), two influential private bankers and strong personalities with ambitions (both were favored in 2018's internal merger).
An ex-consultant who is considered one of the biggest Swiss wealth management talents, Khan may lose some of the star aura that surrounds him in internal melees which are sure to follow.
19-Month Misunderstanding
At the same time, his Credit Suisse track record signals it won't be hard for him to squeeze more performance out of UBS' $2.48 trillion private bank. The 19-month tenure of Blessing will go down as a misunderstanding in the annals of UBS. A class act as a banker by most accounts, the 56-year-old nevertheless couldn't manage to make his mark on either the Swiss business (which practically runs itself) nor on the wealth operation.
It speaks for Ermotti that he had the elegance to allow Blessing, the former boss of Commerzbank, to resign as opposed to being sacked. The same goes for Ulrich Koerner – whom Ermotti refers to in the colloquial «Ueli» – whose was on borrowed time ever since the asset management arm missed ambitious targets last year.
Ermotti's Own Terms
Ermotti left Koerner in the job – his dignity intact – until he was ready to present the Khan-Harford ticket to address UBS' most pressing problems. The most pressing question remains: when will Ermotti directly address his succession and set a date for his departure? He won himself time with the management rejuvenation.
The CEO has regained control of the narrative that eluded his and Chairman Axel Weber's control earlier this year, and any threat that Ermotti could be deposed is banished. He is likely to enjoy enough board and investor support to choose the date and terms of his exit himself.
