Sergio Ermotti’s second term of office as UBS Chairman has only just begun. But the bank’s chairman Colm Kelleher is already thinking about a succession plan.
Sergio Ermotti has a clear timeframe in mind for implementing the integration of the forcibly acquired Credit Suisse: not before the end of 2026 at least, a fact he’s not tired of emphasizing. He also makes it clear he intends to stay on in the leadership role for at least as long as it takes to bring the mammoth task to fruition.
The only remaining international Swiss major bank will then have to ask itself who will succeed today’s 63-year-old top manager.
The List Should Be Ready Within Two Years
Colm Kelleher, chairman of the board of directors of UBS, wants to be prepared just in case. At the «Financial Times’ Global Banking Summit» on Tuesday in London he indicated that he’d like to line up a shortlist of three potential successors for chief executive Sergio Ermotti within the next «couple of years.»
He also told the conference that external hires would also be considered to bolster competition for one of the biggest roles in global banking.
«He Is Not As Young As Some People»
The bank chairman also said he would like to emulate a process similar to the one implemented at his former employer, Morgan Stanley where, at the start of 2023, there were at least three internal contenders to succeed outgoing chief executive James Gorman.
Back in March, when Ermotti rejoined UBS, he agreed with the Ticinese that they should prepare a shortlist of potential successors. The CEO’s task is to focus on integrating the acquired Credit Suisse business.
«I discussed it at dinner with Sergio when he agreed to come back,» said Kelleher. «There is a lot of life in him, but he is not as young as some people.»
Further AT1 Bond Issuance Expected
The board chairman also touched on AT1-bonds and said the write-down was not UBS’ decision. The bank recently returned to the market for mandatory convertible bonds and issued 3.5 billion dollars of bonds, which received huge interest among investors.
Kelleher said to expect further AT1 issuance from UBS in the near future. Analysts estimate that the bank needs to issue an additional 11 billion dollars in such debt in order to efficiently meet its capital needs. «The fact that we had $36 billion of interest in 3.5 billion dollars of bonds is telling you that it is yesterday’s battle.»
Regulator Lacks Teeth
At the meeting, the UBS chairman also spoke out in favor of expanding the powers and sanctioning tools available to Finma, the Swiss Financial Market Supervisory Authority, as news agency «Reuters» writes in a report on the same event. «People should be looking at giving the regulators more teeth,» said Kelleher. «It is obvious that in the case of Switzerland (Credit Suisse), Finma did not have sufficient teeth at the time.»
CEO Ermotti previously said he sees merit in making targeted adjustments to the regulatory framework. «Switzerland should consider a more explicit set of senior management responsibilities similar to those in the U.K.»
Complex Tasks Ahead
Kelleher also commented on the progress of the integration of former competitor Credit Suisse saying that more has been achieved than planned but that there are still very complex tasks ahead. «The simple tasks involve reducing personnel, the complex ones involve assigning control functions, and managing data and IT systems.»
