UBS Chairman Backs CEO Hamers as ING Scandal Casts Shadow

(Bloomberg) -- UBS Group AG Chairman Axel Weber reiterated his backing for Chief Executive Officer Ralph Hamers after a probe of his role in a money laundering scandal at his former employer, ING Groep NV, while declining to predict whether the new CEO would stay on.

Speaking in an wide-ranging interview at UBS’s Greater China Conference on Monday, Weber said that at the time of Hamers’s hiring, the matter had been settled between the Dutch prosecutor and ING, which Hamers ran until last year. The chairman didn’t answer directly when asked whether he was confident that Hamers would continue to steer Switzerland’s largest bank.

“I am very confident that he has the ability to do a good job as the CEO of UBS,” Weber said in the interview with Bloomberg TV. “We are monitoring the situation and we’ll update it as events happen.”

Weber and his colleagues on the supervisory board have been discussing Hamers’s ability to lead the bank following the Dutch probe, which was announced in December, only a month after the new CEO took over. Some board members have informally discussed who could take on the role if the situation became untenable for Hamers, who was picked by Weber in a surprise move a year ago, Bloomberg has reported.

While ING reached a settlement with Dutch prosecutors over the matter in 2018, financial activist Pieter Lakeman appealed the decision and sought charges against Hamers personally, leading judges to order the probe.

Weber himself is due to step down from his role as chairman in April 2022 after a decade at the bank. While the bank has already examined some potential successors, it will intensify the process after the annual general meeting in April, where shareholders will be asked to confirm him as chairman for a final year, he said.

Read more:

• UBS Board Gauges Fallout of ING Laundering Probe on New CEO (1)
• UBS’s New CEO Hamers Haunted by Old Legal Headaches From ING (1)
• Hamers’s Pick as Next UBS CEO Unsettles Some Top Executives

“I do think we are well prepared, and we have some good reviews and previews of some potential candidates, so we are ready to act,” Weber said.

A former head of Germany’s central bank, the Bundesbank, Weber has been an outspoken proponent of consolidation in European banking. Last year, the UBS board discussed a wish list of possible partners for a potential megamerger deal including Deutsche Bank AG, BNP Paribas SA, and Credit Suisse Group AG, Bloomberg reported at the time.

While he renewed the call for consolidation in the interview, Weber said UBS itself is unlikely to play an active role at this point because it’s still in the middle of a leadership transition.

It also makes little sense for UBS to merge with a European rival focused on retail or investment banking, he said. Rather, the Swiss bank would be more interested in acquisitions for its wealth and asset management units that help put distance between itself and its closest competitors.

UBS is looking at acquisitions in China but wants to “see dust settle first on international relationships,” Weber said. For the moment, UBS is keen on taking fuller ownership of a 51% stake in a securities joint-venture and is awaiting a license to start a digital wealth management bank.

“The key thing about China is really the massive client base,” he said. “The investment needs of the emerging middle class in China is a key driver for our future profitability.

(Adds details of investigation in fifth paragraph)