UBS can’t afford to wait for Axel Weber. The former Bundesbank chief is due to join the Swiss lender’s board next May, and assume the chair in 2013. Following Oswald Gruebel’s resignation as CEO, however, that timetable looks far too leisurely. Long handovers make sense during periods of calm. Kaspar Villiger, the former Swiss finance minister who is UBS’ current chairman, was thrown in at the deep end when he was installed in 2009.
Weber was a formidable central banker, but is a former academic who has never worked in the industry. In an ideal world, he would be given time to get to know both UBS and the Swiss political scene. But, UBS’ current state is anything but calm. Its strategy and leadership are in crisis. The $2.3-billion rogue trading loss that prompted Gruebel’s departure has forced the group to accelerate plans to shrink its investment banking arm, while further inflaming Swiss political sentiment against the business. UBS needs a strong and stable top team that will be around long enough to see through its new strategy.
However, interim CEO Sergio Ermotti has only been at the bank since April and is not assured of being given the job permanently. Chief financial officer Tom Naratil has only been in the job for a few months. Investment banking chief Carsten Kengeter remains under a cloud. The key task for UBS is to decide on Gruebel’s permanent successor. But, Weber is not due to join the board until May, when the new CEO should have already been found. Some at the Bundesbank might not like their former president starting at UBS before his year-long cooling-off period is up.
However, the Swiss bank presents fewer potential conflicts of interest than if Weber had joined a German lender. Besides, Weber is already closely involved in UBS’ key decisions behind the scenes. If Weber can join the board early, that would clear the way for him to take over as chairman in May. Villiger has been a safe-ish pair of hands. But, UBS has a stronger, younger replacement waiting in the wings. It should accelerate his elevation.