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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  UBS Group AG    UBSG   CH0244767585

UBS GROUP AG

(UBSG)
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Delayed Quote. Delayed Swiss Exchange - 04/06 11:30:46 am
9.234 CHF   +6.68%
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UBS Puts Digital First With New Chief -- WSJ

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02/21/2020 | 02:48am EDT

By Margot Patrick

UBS Group AG spent the last nine years reinventing itself as the world's largest wealth manager. For its next act, the bank wants technology to drive higher profits from its client base and reduce costs.

On Wednesday, it tapped a digital banking specialist, Ralph Hamers, to be its next chief executive from Nov. 1, surprising investors and analysts who expected either an internal candidate or an outsider with experience running a wealth management business. Mr. Hamers will join from ING Groep NV, where he has been CEO since 2013 in a 29-year career mainly focused around retail and corporate clients at the Dutch lender.

Mr. Hamers got the job after building a reputation at ING for successfully moving more customers out of branches and onto their phones and computers. Under his leadership, the bank also increased revenue as it improved internal systems and the technology behind how it interacted with clients.

The moves let it cut costs by shutting hundreds of branches and shedding thousands of jobs in Belgium and the Netherlands.

UBS Chairman Axel Weber said Mr. Hamers beat out other candidates to succeed Sergio Ermotti in a 15-month CEO search because of his record in transforming ING. Like UBS, ING underwent a lengthy post-2008-crisis restructuring to narrow its operations and return to financial health.

"The hope that we have is that he will help us get to the next level in digitalizing our business," Mr. Weber said Thursday. Already, UBS spends around $3.5 billion a year on technology. The bank's strategic plans won't change, according to the chairman. The Swiss firm lowered its financial targets in January to reflect weakness in the world economy and the effects of low and negative interest rates.

Mr. Hamers said he hit it off with Mr. Weber through their work together at an industry association, the Institute of International Finance, where Mr. Weber is chairman and Mr. Hamers is a board member. A uniting feature at ING and UBS is that they both had to take bold actions to weather the challenges facing banks, he said. Both are also on a list of systemically important banks compiled by global and national regulators, reflecting their size and complexity.

Mr. Hamers declined to say whether he would look to cut bank branches in Switzerland, where UBS has a large retail network. He plans to dig in deep to understand UBS's business model once he starts a transition period at the bank from September, before taking the CEO role.

For the Dutch executive, going to UBS should mean a big pay rise. Mr. Ermotti is among Europe's best-paid bank CEOs, making around $15 million a year through salary and bonuses. He started as UBS CEO in 2011 and helped boost its share price by shrinking its investment bank and centering its activities around wealth management.

In contrast, Mr. Hamers was denied a raise in 2018 from a EUR1.75 million ($1.9 million) base, and had to forgo a bonus because of a money-laundering scandal. ING paid EUR775 million that year to settle a criminal investigation over failures in its anti-money-laundering systems. On Thursday, Mr. Weber said Mr. Hamers had been cleared of any blame in the matter and that UBS considered the incident in making its CEO decision.

The UBS chairman declined to say how much Mr. Hamers will be paid. Mr. Ermotti's base salary in 2018 was 2.5 million Swiss francs ($2.5 million).

He said Mr. Hamers's lack of wealth experience isn't a hindrance, since the bank has two of the industry's top executives -- Tom Naratil and Iqbal Khan -- leading that business division.

Other UBS executives who were considered to be potential successors to Mr. Ermotti have left in recent years, including former wealth management head Juerg Zeltner and investment banking boss Andrea Orcel.

The bank's main rival, Credit Suisse Group AG, also named a new CEO this month. Thomas Gottstein, formerly the head of its Swiss business, succeeded Tidjane Thiam, who was forced to resign after a spying scandal.

Write to Margot Patrick at margot.patrick@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
CREDIT SUISSE GROUP AG 5.46% 8.018 Delayed Quote.-41.81%
ING GROEP N.V. 9.39% 5.051 Delayed Quote.-56.77%
UBS GROUP AG 6.47% 9.216 Delayed Quote.-29.19%
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Financials (CHF)
Sales 2020 28 300 M
EBIT 2020 5 482 M
Net income 2020 3 669 M
Debt 2020 10 757 M
Yield 2020 8,11%
P/E ratio 2020 8,11x
P/E ratio 2021 7,60x
EV / Sales2020 1,49x
EV / Sales2021 1,46x
Capitalization 31 300 M
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Technical analysis trends UBS GROUP AG
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Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 11,72  CHF
Last Close Price 8,66  CHF
Spread / Highest target 84,8%
Spread / Average Target 35,4%
Spread / Lowest Target -43,4%
EPS Revisions
Managers
NameTitle
Sergio P. Ermotti Group Chief Executive Officer
Axel A. Weber Chairman
Sabine Keller-Busse Group Chief Operating Officer
Kirt Gardner Group Chief Financial Officer
Reto Francioni Independent Director
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