Status Update

Feb 20, 2020

Press Release

Quite a busy day for all of us. So we have about 35 to 40 minutes for this press conference as we have lots going on. I've been joined today by Akzo Weber, our Chairman and then by Sergio Amoty, our CEO and Ralf Hammers, the CEO of ING and incoming CEO. So with that, I would like to give the word to opening remarks for Aksel. Thank you, Marc, and thank you all for coming here today to Zurich, to our headquarter here at UBS. Today is the day where we are announcing and have gone out this morning with a key senior leadership change at UBS. UBS has been honored to have Sergio Amati serve as the company's CEO for almost 9 years. Since assuming the role in 2011, Sergio has been an outstanding CEO. He has led the company's transformation following the financial crisis and set the stage for a tremendous opportunity that lies ahead. On behalf of the entire Board, I'd like to thank Sergio for his leadership, his many significant contributions to the term and his long standing commitment to UBS' clients, employees and other stakeholders. It is sometimes said that the CEO only has 2 tasks. One is to prepare the place for when he leaves. Sergio has built and leads a very experienced group executive board that, working with the new CEO, will continue to realize the success story that UBS began some 9 years ago. The other is to leave the place in a better place, in a better way than we found it. And the firm is unrecognizable today from where the company was when we inherited it. Today, the company is more visible. It has, when you look from the outside, some major achievements that you might not see as much in the first place, which is the overhaul of our culture, which we have both for all these years viewed as the important part, the key really to the success of turning UBS around, promoting and hardwiring good behavior in the culture that we have. Today, the institution is stronger and more client focused. Today, the institution is solidly and sustainably profitable. We're the number one wealth manager globally. We're the best bank in Switzerland and strongly positioned for growth in the core businesses wealth management, and the geographies, Asia, Europe and the U. S, and we can build our leadership in technology and sustainability to be the core of our future success. These are the successes that we hope to see continued under the leadership of Ralph Hammers. Our appointment of Ralph concludes a rigorous succession planning process that the Board commenced 15 months ago. As Chairman, I have led this internal and external search for the right executive to lead UBS into the future. Ralf is that right person. Ralf is a proven leader in banking and a strong cultural fit for UBS. Under his leadership, ING implemented a fundamental shift in its operating model and is now considered one of the best examples of digital innovation in the banking sector. Ralph is a battle tested, charismatic executive with the experience and personality to successfully write UBS' next chapter. I have known Ralph for more than 6 years, initially from our work in the European Banking Group and in the Institute For International Finance. We have a successful strategy, and Ralf is best placed to lead its future successful execution. I could not be more pleased to have such a talented individual leading our company into the future. But let me pass the microphone to Sergio for his remarks. Sergio, please. Thank you, Axel. Thank you for the kind words. And well, of course, I've been honored, and I'm still very honored to lead UBS and to be the CEO for the last 9 years, I think that it's fair to say that when you start your banking career as an apprentice, this is something that you don't even think about dreaming becoming the CEO of the largest and the best bank in Switzerland. So but all like all the nice and beautiful dreams, they have an end. So and here we go. So I think it's the right time for sure for the bank and also for myself to think about the next chapter of our life. And is I'm going through all of this with a deep sense of satisfaction and for everything that has been achieved over the last few years. They were not necessarily always good times, challenging times. But I think the team, the management team, not only the present one, also many of my colleagues that were with me in the Executive Board And also, most importantly, the more than 60,000 people in the bank have contributed and were instrumental to allow all of us to move into where we are today. I think that's Axel already mentioned where we stand in terms of strategic positioning, being the leader in wealth management, not only because we are the largest, but actually, we are the only truly global wealth manager organization. We are competitive and present in the major markets and well positioned for growth. And we have the best and the largest bank in Switzerland. We have businesses that in the Asset Management and the Investment Bank are competitive in those areas where we choose to compete. And I think that's all this is very rewarding. Our strategy was also always built on a true belief, not necessarily because of regulatory requirements, that in order to be successful in Wealth Management and to be able to capture opportunities, you need to be strong in your capital position. Our capital position is rock solid. And I think that's and we are also really focused more and more around what we can do the best for our clients. So it's a stagnation between making sure that our clients appreciate what we do. Employees are proud to work in for UBS. And last but not least, the shareholders have also appropriate returns on their investments has been always a focus for me. So as I mentioned before, it's always important. Axel mentioned the next steps. I think that's I'm glad also to see that UBS today is quite a enviable position to be in control of its destiny. We have maximum strategic flexibility as a firm. So it's a luxury that we will I'm sure we'll continue to go on. And as the last point, which is very important for me is that I'm very determined, and I know my colleagues in the executive board and I know all my colleagues in the bank will only echo and support what I'm telling you now, is that our next focus is very simple. We are focused on delivering on our plans for 2020. They are ambitious plan. There is no room for us to be distracted. And I'm pretty sure that we're going position UBS for an even better future under Ralf's leadership. I know Ralf for many years now. We have been serving in industry associations together, so we got to know each other. Of course, we are somehow kind of competitors, but the fact that we were not really competing face to face on the same business we've made, even our relationship on a personal level easier to be managed. So my commitment is to make the smoothest transition possible, and it will be 1. So I'm fully committed to UBS and to Ralf and to my colleagues in the bank to have a successful end of this chapter. So many thanks. And now let's pass it to Pallav. Thank you, Sergio. Thank you, Axel. Let me start by saying that I'm truly honored to have this great opportunity to lead UBS. I think if you look at UBS, and maybe you're getting used to it here, but if you look at UBS from the outside, it's, it's, has great respect. Great respect for the franchise it is, great respect for the high quality it provides, the position it has established. It has an outstanding client base. It's got a global reach through many of its business divisions. It has a demonstrated capability to weather through quite some storms, whether these are economic storms or crisis storms, the storms that we all know that the banking industry has weathered. And in the leadership of Sergio and Axel, they have really transformed the business. So Aksel already mentioned that over the last couple of years, we got to know each other, working in different industry associations in the European Banking Group, where we met regularly, but also under AXIS leadership in the international institution of finance. So basically, we've always kind of exchanged views on where things are going, what are the trends, how do you deal with these trends. At the same time, with Sergio, same thing there in other industry associations. We've always worked together. I think we've always been very open because although we are I represent ING and represented ING and now we're representing UBS, we were not really direct competitors. And therefore, we were we could be pretty open as to how do you deal with specific challenges ahead. And that has generated a lot of mutual respect between the 3 of us, really. So what I've really seen from the outside is that Aksen and Sverdrup together have really guided this institution through transformation to success and by daring to take bold daring to take those bold actions in order to make sure that you come out stronger. And that is what they have truly done over the past many years. And that's what kind of generates a lot of admiration on my side for the gentlemen involved, but for UBS as an institution as well because in Nenji do it all together. There's quite some employees that have to go through transformation as well, some of these changes as well. And that has been done successfully. So the for me, it's really landing in a job and built from a very strong foundation that is there and make sure that together with the Board of Directors and with the UBS employees and UBS clients, because in the end that's what we do it for and who we do it for, for our clients, that we continue to build on the success that has been established. Leaving UBS will be a great professional challenge for me. That's why I'm so attracted to the opportunity. It's a business of global scale. It has a world class wealth management business. The quality of the team is superb. So all the elements to continue on a successful journey are there. For me, it is just to make sure that together with that team, that we continue to weather the continuous challenges that we as a banking industry are subject to. I think if you look at some of these trends, whether it's kind of the rate trend, the interest rate environment, whether it's digitization trend, some of the things that I'm very passionate about that and which I also see quite some support to the banking industry in order to make sure that we build for a successful future. There's many of those trends that I'm sure we can work together on and making sure that we'll continue on a very successful journey that has been established by Sergio and Akzo already. So with that, I'm truly, truly honored and looking forward to being here. Thank you. Okay. Thank you, gentlemen, Ralph, for those remarks. Now we move to the Q and A. May I please ask you to introduce yourself by name and the media care you work for. Hi, Marion Hofstmeyer with Bloomberg. So I have to ask the obvious question I think a lot of analysts are asking and ourselves in the room are asking and something you mentioned as well. You come from 2 different worlds of banking, retail versus wealth management focus. Can you enlighten us a little bit more as to what this means for UBS, particularly because you are the wealth management bank of the world, and Mr. Halmer doesn't necessarily come from that world? So thank you. So let me take that. If you look at ING and you look at UBS, don't forget that we're 2 of a kind in a very important sense. We're both global systemic banks. The complexity of running a global scaled business and to be in that top league of global banks has its own challenges for a CEO, whether it's regulatory action and interaction at multiple fronts with regulators throughout Asia, starting in Australia, Hong Kong, Singapore, Europe, here in Switzerland with the ECB in London and in New York, it's something that both CEOs have been very experienced in and navigated successfully their own institutions. We have in Wealth Management with Tom Naratil and Iqbal Khan, 2 of the world leading people in Wealth Management, and they will continue to be in charge of that business. Rob's job is to lead the group and to implement the strategy of that group globally. So, the CEO job is not the same job as the one you indicated. We do have very competent people. And actually, when it comes to operations end, ING is a world leading institution in digital transformation and in effective operations, I'm very sure that Ralf will work with Sabine Kellebusa, who's our COO, in driving that business forward. And for me, whilst he was able to put a spin and a fingerprint on digitalizing the business his institution was involved in. The hope that we have is that he will help us get to the next level in digitalizing our core business in addition to the traditional businesses we've run. So, there is a very good complementarity, and there's a very good impact that he can have, bringing the skill set he has as a global experienced leader and helping us take UBS forward and implementing our strategy successfully. Mr. River you said last year in an interview with Ansett said, candidates from outside should only be brought in, in exceptional situations. Is UBS in an exceptional situation today? No. What I said is, if possible, we would like both internal and external candidates to be evaluated. And the Board has communicated very consistently over the past year about the succession planning process and the time line. Sergio has been in his role for 9 years. He's one of the longest serving European CEOs and he's built a successful bank. We have, in a very rigorous and thorough selection process, looked at outstanding internal and external candidates, and we agreed in the end that the right person to lead UBS into the future is Ralf Hummers. He has a proven track record as a CEO. He is a successful person at the helm of a bank of similar size. He's a leader in digital transformation. And by the way, he will join us already in after the summer break and work with Sergio Amati on the team, and he will earn his UBS passport during that time. Okay. Maybe I'm Holger Harleys from Tamirge News Group, Taguson Seiler and Baselab Seitel. Mohammad Almaty, you said in your communication this morning that you will now open up the next chapter in your personal life. What will it look like? Will you run for the presidency of UBS once Mr. Weber will step down? The second question for you, Mr. Hammad. Do you think that your experience in digitalization may work for a wealth management bank, too, because as a retail bank, you can roll out globally standardized products. But the high net worth clients at UBS, of course, they want to have tailor made solutions. So where do you see of course, you didn't have really close look at all this, but what is your idea how you can implement more digitalization to bring the bank forward? What are your ideas? Thanks. Why don't we start with Sergio? Well, thanks for the question. I don't think I'm very famous for running for anything. So I'm now focused on my duties for the next 8 months, and that's all about. Today is about the next the change in the leadership of UBS, and it's not about my future. So I think that I will address that when it's the appropriate time. Well, thanks for your question. I don't think you have to kind of just focus on digitalization per se. I mean that's not a goal in itself. If you run a company like ING, which has a copper investment bank, by the way, in which I grew up, not so much on the retail banking side, I grew up in the corporate investment banking side of ING, with a different profile of the global coverage on the corporate side for sure. You just look for how you can improve the activities and how you can improve the customer experience. That's where a lot of digitization happens moving forward. The institution of UBS has a completely different profile. And I will work with Sergio and Axel to learn about GBS and then just see where new technology can help us as well. But new technology in itself, there is also not a goal. The goal is how can we truly improve and continue to service our clients. That is the starting point of everything we do. And if you have to do that in a way with value added services that are tailor made Or you can do it within the line data modeling and artificial intelligence, which I think will certainly have its impact in many of the dimensions of the banking industry as well, why not this one, then you have to look at that as well in order to improve how and what you can deliver to your clients. It's just a spectrum of some of the tools that you have. There's many other tools as well. And Mr. Adich, before you get the microphone to ask me the same question as you asked for Sergio, let me assure you that Sergio and my main focus is to pass the bank on to the next generation, to install sustainably into the bank the virtues and the success and the drive that we wanted to bring to this bank over the years. As I said, the bank is a different bank than the one we inherited. This is a process that will go on for almost the entire year in handing over in a very orderly process. Jokingly, you could say it happens at a speed that will make sure that it's not a hasty process, it's a well thought through process, And there's a good de boarding of Ralf as his current institution. That's why he's staying till the Q2 and a good onboarding with us. We have transformed almost half the executive board under Sergio's leadership over the last 2 years and entrusted that in the next generation. This is part of this process. And what is part of this process is the new generation. It's not about me or Sergio. It's about the team, and it's about the bank. Okay. Thank you. Let's take a question from the call. We have Margo Patrick from The Lawsuit Journal. Hi, good morning. Mr. Weber, you mentioned the overhaul of UBS's culture. I just wonder what message does it send to hire a CEO whose bank allowed extensive money laundering and in the words of Dutch prosecutors, was seriously deficient as a gatekeeper of the financial system? So what was the question? You stated the fact My question what message does it send to your staff and to the culture of UBS? That's the question. Look, we have run a very extensive and in-depth due diligence process with support of both external legal counsel and in Switzerland and in the Netherlands around the situation that you just described. In addition to our own due diligence, FINMA has thoroughly reviewed and interviewed the candidate as Swiss regulators do and raised no objections to his appointment. We have been also, if I can remind you, at UBS, transforming many legal and litigation risks that we found and inherited at the bank. Part of your job as a CEO is to mitigate risks for the bank and to clean up if the bank has any misconduct that consists. And it's part of the process you need to run as a CEO. From all of our insight that we gained, there is no personal dimension of Rausch Farmers having been involved or being blamed about this. And the regulators, you might see that, have come out with a report that is publicly available, and regulators have looked into that. So we're very confident that we considered all arguments and that we took the right choice of having somebody at UBS that has the right focus. And I can also assure you one of the focuses that a CEO that has gone through such a period, we always have in the future is that AML KYC is at the core of how the bank is managed. Okay. Let's go to Mike Shields, Reuters. Thank you. Mike Shields from Reuters. If I can have one question looking backwards and one forward, Mr. Weber. How long have you been looking for the new CEO? And when did you first start to consider Mr. Hammers for the role? And looking forward, what does this mean for your Chairmanship? I assume that you'll still remain Chairman until 2022 is what I've understand. And I guess the question is if a foreigner is now going to be the CEO, does that mean a Swiss person is more likely to become Chairman in the future? Thank you. Well, I would say the same at the risk of being asked again at a later stage. Of course, it's absolutely key for us that the person that leads UBS has experience with UBS. And if it's somebody that comes in from the outside, that that experience is gained and the UBS passport is earned in the onboarding process. When I joined UBS, I wasn't Swiss. I came from the outside. And my predecessor, Kasper Siliger, gave me a very valuable advice. You have to do a habitization tour. I went to almost every branch out throughout Switzerland and visited staff in order to get UBS. And what we're doing and what RAS is doing is exactly that, getting to know the bank. I said early last year that we're in the early phases of a process that we just concluded. So the process started, as I said, 15 months ago as a really intensive and very worked out process, very inclusive with all internal and external members of the Executive Board. Going forward, my future in the bank is in the hands of shareholders. Shareholders in Switzerland vote at every AGM, and you get a 1 year mandate. I'm ready to put myself up for the next AGM for another period of election and the Chairman transition and the Chairman search will commence in 2021 after the new CEO has joined, and we'll take it from there. Okay. Central line, I have. Mr. Prache, Handelsblatt. Since we've been talking about litigation. I'm wondering if the French case played any role in that decision, Mr. Weber, to change the leadership of the bank now. I mean, this is a complicated phase right now that we were expecting a ruling from France this summer that could include a hefty fine for the bank. I'm just wondering, is there any change in how you handle this? Will Mr. Hammers have to deal with it? Or is it still on Mr. Amotiv? Look, I've outlined the timing. And of course, the Board and management have been laser focused on the French case since the verdict last year. We're very focused on the strategy. The trial will commence in early June and will happen already way before Mr. Hammers joins us. Of course, part of his forwarding, once he's with us, will be the entire risk and litigation portfolio of UBS, including the French case. So of course, we will need to talk about it. But we are focused, both Board and management, on this trial. And Sergio and myself will be the ones that lead this engagement at with the French authorities. And the strategy of UBS is really focused on making an improvement on the verdict in the first instance. So rest assured, the French case had nothing to do with our choice about timing or about moving on. This was before we actually started on the process was actually before the French word it was given. And so it is a longer dated process of handing to the next generation. And Sergio and I have always been very clear, this is part of running the bank for us. It means we need to pass the leadership of this bank to the next generation. And we're very committed to it because we are very committed to this organization. And we work together well. And I said Sergio was involved from the start in this process and see it as part of running the bank rather than part of changing the bank. Okay. We can take about 2 more questions. Maybe Hetulof 1. Yes. Thank you. I am just a little bit I mean, you mentioned the parallels between the 2 banks in terms of systemic importance. There is one difference I find quite puzzling. This is the pay of the CEO. I mean, you, Mr. Witter, you're earning more than Mr. Holmes is earning now. As far as I understand, this is obviously quite an unusual situation. And as you mentioned, Mr. Holmes has done a very good job for EUR 1,500,000. And I'm just wondering how much many how many millions do you need to make a good job? I mean, explain us a little bit how you see the pay logic? Thank you, good afternoon, Paul. Look, for me, it's not about money. This is about passing the baton to the next generation. Differences in pay happen throughout the job. So I'm pretty sure the anger at CNBC will earn you more than you. So does that mean that the anger at CNBC is more happy or look more motivated in doing the job? It's nothing to do there. Pay differences have many dimensions. One of them is the complexity of the bank. The other one is the country in which you're located. So, look, for us, the point was it's not about pay. It's about leadership. And we wanted to look for somebody who has the leadership skills to lead an organization as complex as this is. And we'll take we'll talk about pay when we get to that point. Pay at UBS is related to performance. We are expecting performance. Sergio has shown performance. We will expect from the new leader to show performance. If he performs well, he will get paid off. Off. Okay. We will take 2 more calls on the phone because I've been waiting. The next one is Eva Reuerus from I'm not trying to pronounce the publication. I have two questions for Mr. Hammers. First, if you can give some more detail about what happened yesterday. When exactly did you announce to ING that you were going to UBS? And how does this relate to the pulling of the bond yesterday? What happened there? And then my second question, is this a promotion for you to step to the UBS? Yes. So clearly, yesterday, there was a situation in which there was information that we thought made it prudent to pause the issue at that moment in time. So that is this is what happened yesterday. So that's why we paused it. And the other question, there's 2 completely different institutions with completely different set of challenges. And on one side, I'm very proud of what we have achieved in ING over the last, call, 28, 29 years that I've worked there, but certainly also over the last 6 to 7 years that I was leading it. First, restructuring ING, repaying the state, coming out with a very successful digital strategy, making sure that we had a good team in place to continue the commercial growth that we have shown every quarter and again. So I'm very proud of that on one side. On the other side, when it comes to a moment in life where you feel that, okay, what is the next step? What are you looking for? Are there other professional challenges there as well? And UBS presents exactly that challenge for me, which is a global institution with a superb reputation, with a global position in wealth management. So for me, it's an interesting very interesting challenge to take on and to it's clearly an honor, as I indicated already in my The The next question on the phone is from Stephen Morris of Financial Times. Stephen? Hello. Can you all hear me? We can hear you well, yes. Yes. Okay. Thank you. I'd just like to ask a similar question to one of my peers again. First to Axle Weber. I'm just wondering if you will seek another year long extension after the search for your successor begins next year? And a question to Mr. Hammers along the lines of another one. Can you just tell me sort of how much from your perspective the potential to increase your pay by 7 times played in your decision to take the role? Well, look, if your question was how long will the process take to move into the next succession, we'll see. We have I told you this process will start after the onboarding of the new CEO in 2021. And I always said that I'm available if shareholders vote for me to serve till 2022 in the best interest of the bank and to facilitate the transition to the next CEO and to the next leadership team. My job depends on whether UBS is in a phase where that passover can happen smoothly, and that is the right point for me then to go. But it's all about UBS and the transition. It's not about individuals. Yes. Thank you. Yes, Stephen, thanks for your question there. No, it's clear that it's a professional challenge that is very attractive. And also the state in which UBS is, as we have indicated, it's gone through massive transformation. It's doing really well. And having then being approached by Akzo to discuss the future, that is what is about that is what the decision was all about. It's room. Anyone? Cathro Dely, Swiss Dely, La Jiffy. A question, what does mean this nomination that it means more important focus on retail banking is the strategy of the group since you mentioned retail banking position Switzerland, the 2nd place after waste management this time? You're asking me? Yes, Mr. Weber. Okay. No, look, we have a strategy. We have a strategy that works. It's all about the implementation of our successful strategy. There's no changes in our strategy. We keep being focused and will continue to be focused with Sergio over the rest of the year to successfully implement our strategy in an admittedly challenging market environment. But this is not about changing strategy. This is about changing CEOs in a process that will play out throughout the entire year. Catherine Barret of Feneus. I just wanted to clarify, Sergio, does your contract run out when Ralfheimers begins here or are you staying in any kind of advisory or other capacity to UBS? Or are the ties kind of severed come autumn? We haven't finalized this aspect of they are not critical to this process. We are thinking, as Axel mentioned before, we are thinking about what is the best way to go through the transition. And once this day is over, over the next couple of months, I'm sure we're going to start to think about how to manage this very secondary aspect. And we are not focused on TOS issues, and we have a clear mutual gentleman agreement understanding between Axel and myself and the board on how to manage those processes. I know you need to be very energetic and passionate about UBS. Do I understand you to say you'd be willing to stay on in some type of advisory capacity? As I mentioned before, this is not the day to talk about myself and my future. It's about to talk about the new leadership of UBS and how we're going to manage the transition, and then just focus on that one. Thank you. May I put the question to Mr. Hammers? Would you like him to stay? Would you take his advice? We have, as indicated, a 2 month transition period in which it is very important that the secretary continues to lead. Created from now on that. It's quite some time already there. So for me, it's very important that he's there and that I can actually have the time to learn about the business, learn about the clients, learn about the people. And that's what's important for the transition period. Can you deliberately design it in a way that there would be an overlap between the 2 executives in order to secure maximum continuity? So this is not about discontinuity. This is about continuous leadership on our strategy. Mr. Kove? Yes. Kove from Blick. Last question, Mr. Hammers, you are like a crack of digitalization. What does this mean for small and middle UBS customers in Switzerland? Do we have to say goodbye to all the UBS branches in Switzerland in the near future? Well, I mean, as I said, so I will start a new UBS in the autumn. That's when I will kind of dig deep and get a very good understanding of the business model and how we can further improve customer experiences, whether it is in the retail side, whether it's in the investment banking side, whether it's on asset management, whether it's in the wealth side. So there's absolutely nothing I can say about that now, and I think it should be like that. The strategy that's out there is a very credible strategy. It is working. It is being implemented. There's a whole team behind that. All of the UBS people are behind that. So let's focus on that and how we continue that. Well, maybe if I can step in here just to underline that we are by far the leader in Switzerland in digital. We have been going through a huge transformation on what we do at the branch level, how we interact with clients through multichannels. And as the needs of clients evolve, we have been responding. This is also one of the reasons why we keep investing a lot in technology. We invest €3,500,000,000 a year in technology. We continue to believe that this is the only way to really stay relevant and competitive in the face of clients. And in that sense, the real it's never going to stop this transformation. So we have been already going through, as I say, not only redefining the need of the physical access, but also what you're doing in the physical space. So I'm sure with RALSA, we're going to keep that momentum and stay and confirm our leadership in Switzerland and most importantly, also learn from countries, the Nordics, where they have a higher penetration of digital banking as a function of clients embracing more digital channels. And by the way, just to remind that contrary to what everybody expects, digital clients are clients that view are more satisfied with the services of the bank, and they tend to use more products of the bank. So it's very important that we continue to think about our leadership. And of course, for the Swiss business, it's Ralfa, the value will be absolutely critical to keep our status. If I just add also sort of reaction to your question. It sounded a bit like digital and branches are incompatible. If you look at what we did at our branches, they've been technologically upgraded massively over the last years. And at our branches, you can increasingly work also digital as a client and have a digital experience. So I don't see that necessarily as a conflict that you do have branches and that you digitalize those branches and make them technologically more aware. So, I don't even see the difference between the two strategies. They're not exclusive. They're actually mutually enhancing. So thank you very much, Ralph, Axel, Sergio. And thank you to you all for coming here, and see you again soon. Bye bye. Thank you, everyone.