NEWSMAKER - Suave UBS interim CEO a contrast to gruff Gruebel
ZURICH (Reuters) - Sergio Ermotti will have to use all his legendary charm as well as steely determination to prove himself a worthy permanent successor at the helm of UBS to Oswald Gruebel, who resigned following a $2.3 billion trading scandal.
The UBS board of directors on Saturday accepted the resignation of German-born Chief Executive Gruebel, 67, and appointed Ermotti, who hails from Switzerland's Italian-speaking region of Ticino, with on an interim basis.
Since joining the Zurich-based bank in April as head of Europe, the Middle East and Africa, Ermotti has been regarded as a likely choice for a big appointment: a former Merrill Lynch head of global equity markets, he straddles the investment banking and wealth management worlds.
At 51, he also fits the bill to be part of the "generation change" ex-Bundesbank head Axel Weber has said will be one of his top priorities when he takes over as UBS chairman in 2013.
His nationality may also prove an advantage in helping UBS rebuild its image at home at a time when the public are losing their patience with the country's biggest bank after a run of crippling crises.
"I'm fully aware of the magnitude and complexity of the task ahead and I will take the necessary humility and energy to succeed," Ermotti said in a phone conference with journalists, switching easily between English, German and French.
The dapper Ermotti said replacing Gruebel was daunting but he had already learned a lot from his predecessor, who in deciding to resign had shown he lived by the strong values he preached.
But Ermotti's smooth manner is in stark contrast to the gruff German who angered many when he threatened to move parts of the bank abroad in response to tough Swiss capital rules meant to prevent a repeat of the state bailout of UBS in 2008.
Ermotti, who said the trading scandal had revealed a risk exposure that was "totally unacceptable", said his first priorities would be to review the bank's risk controls and conclude an internal investigation into the losses.
"We need now to focus more on operational risk and make sure that all the work that's been done is not thrown away by an incident like this," Ermotti said.
Ermotti's chance to head Switzerland's biggest bank comes after he was passed over for the CEO job at Italy's UniCredit when Alessandro Profumo was ousted a year ago.
Ermotti joined the Italian bank at the end of 2005 as head of the markets and investment banking division. He became deputy CEO in 2007 with responsibility for corporate and investment banking as well as private banking.
In his five months at UBS, Ermotti has already met key clients, overseen relations with European regulators and driven the bank's strategy of making sure its investment bankers and private client advisers work closely together.
Like Gruebel, Ermotti started his career in banking straight from school with an apprenticeship in Lugano and later completed an advanced management programme at Oxford University.
He made his first investment -- buying a bond -- as a teenager, he told Reuters in an interview last year.
Prior to joining UniCredit, Ermotti, who likes to ski at the luxury Swiss resort of St. Moritz, worked at Merrill Lynch for nearly 18 years based in Switzerland, London and New York, heading global equities between 2001 and 2003.
Some analysts, however, question whether he has the gravitas for the top UBS job.
"I have struggled to find many investors who have been enthusiastic about Mr. Ermotti," said Mediobanca analyst Chris Wheeler. "It will be greeted with less than enthusiasm by the market."
Chairman Kaspar Villiger said Ermotti was a strong candidate to take the helm permanently and declined to comment on whether investment bank head Carsten Kengeter, seen as a potential successor until the scandal, was still in with a chance.
Villiger would only say that the board was looking at both internal and external candidates and should decide on a permanent replacement within the next six months.
Whatever the board's succession plans, Ermotti and Kengeter will have to work closely together to get to the bottom of the trading scandal and to prepare an expected revamp of the investment bank ahead of a Nov. 17 investor day.
The relationship could be tense as Ermotti looks set to scale back ambitious targets Gruebel had set Kengeter to restore the division to its pre-crisis glory, saying UBS was not aiming for a top five spot in investment banking league tables.
"Our ambition at the end of the day is to be a profitable bank, as an integrated bank," he said.
With former Swiss finance minister Villiger set to cede his post as chairman to Weber, Ermotti's passport gives him an edge over Kengeter, as the bank might be wary of two Germans at the top, given rising anti-German sentiment in the country.
Ermotti, who names 'The Sting' as his favourite film, maintains close ties to his home region, serving as president of Lugano-based Darwin Airlines and a co-owner of a chain of luxury hotels.
(Additional reporting by Steve Slater; Editing by John Stonestreet)
- Tweet this
- Share this
- Digg this
Trending On Reuters
India has formally adopted inflation targeting, a historic monetary policy overhaul that marks a victory for Reserve Bank of India Governor Raguram Rajan, as the government makes subduing chronically volatile prices a priority. Full Article | Factbox