It’s not been a good week for Deutsche Bank chairman and CEO Josef Ackermann.
First, he was forced to roll over his Greek debt for the greater good of the eurozone.
From the FT:
Mr Ackermann, speaking at a conference in the German parliament in Berlin on Wednesday, clashed with Angela Merkel, chancellor, over the willingness of the banks to ease the Greek government’s debt burden.
“I am assuming that we will lend our hand to a solution, but not because we are doing it with pleasure,” Mr Ackermann told the chancellor.
Ms Merkel retorted that private creditors should do it “willingly” because they had an interest in sharing the burden with taxpayers if they wanted to continue doing business in a politically stable environment.
And now the man he wanted to see run Deutsche Bank, or at the very least take on a very senior role, has joined a Swiss rival.
The UBS press release, on Friday morning:
The Board of Directors of UBS AG will nominate Axel Weber for election to the Board at the Annual General Meeting on 3 May 2012. If elected the Board plans to appoint him as non-independent Vice-Chairman. After his first year in office, he is expected to succeed Kaspar Villiger as Chairman of the Board in 2013.
Axel Weber, born in 1957, was the President of the Deutsche Bundesbank from 30 April 2004 to 30 April 2011. Prior to that, he was a professor of economic theory and international economics, teaching at various universities in Germany. In addition, Weber was the director of the Center for Financial Studies in Frankfurt am Main and holds honorary doctorate degrees from the University of Duisburg-Essen and the University of Konstanz.
Now, Weber had been seen in the market as something of a dark horse to replace Ackermann if he chose to retire a year early in the spring of 2102. That was before ‘people close to the situation’ moved to knife the former Bundesbank president, a few months back.
From the FT, again:
People close to the situation consider it unlikely that the bank would appoint as its chief executive an academic economist and central banker with no day-to-day commercial banking experience. But Mr Ackermann, who is closely involved in trying to find his own successor, is known to respect Mr Weber and may have envisaged a senior role for him at Deutsche.
Analysts believe that if Mr Weber were to have a role it would most likely be representative and in some sort of combination with an experienced insider, such as Anshu Jain, head of Deutsche’s corporate and investment bank. Mr Weber’s political connections in Germany could complement London-based Mr Jain, who heads the unit that makes most of Deutsche’s profits.
Presumably today’s news means Mr Jain and his investment bankers have won the power struggle at Deutsche Bank and Jain is now a front-runner for the top job. Or does it just mean that the succession question has been thrown wide open again without and there’s still no obvious solution?
(Note – Ackermann’s term ends at the AGM in 2013, and a successor will have to be have been identified sometime in 2012).
As for UBS, if Weber becomes chairman while Oswald Grübel, the rough-cut, former bond trader, is still chief executive it will mean both of the top positions at the bank will be controlled by Germans.
But it’s something of an if. Weber might be well connected but he’s a bit of a prickly person and could conceivably clash with Grübel, analysts point out.
From Collins Stewart:
Weber is generally regarded as a very well-connected but abrasive individual who, during his time as BuBa president, took a hardline on many EU issues.
Will his appointement be viewed as a positive for UBS? I’m not so sure. Weber’s connections will be helpful in Germany and, questionably, in Europe more generally. But Weber also has his enemies and is not regarded as collegial.
He could therefore be the right person to have in place in the event UBS eventually decides on a major restructuring, including a shrinkage or selective domicile-shift of its Investment Bank.
Indeed he could.
Then again, he’s never held an executive function at a commercial bank, something that won’t necessarily help him plot a strategic course for UBS, notes the banking team at RBS.
We wonder if this puts him in a strong enough position if and when it comes to help draft the strategic course of UBS and maybe even challenge executive management. Appointing someone with a strong central banking background may well put Weber in a comfortable position when dealing with the demanding Swiss regulators, but his German background and lack of Swiss banking experience also mean he will have to build his network in the inner circles of Swiss banking from scratch. The timing of his appointment should also mean that he could well play a role in determining the succession of current CEO Gruebel, who came in to turn UBS around in 2009 and may well decide to retire in the next two years. Overall, we have no idea as to what Weber’s ideas might be regarding the strategic direction UBS should take and how the profile of UBS’ next CEO should look like.
Still, he gets a golden hello” of $2.4m along with 200,000 UBS shares.
Related link:
Weber named next UBS chairman – FT