Ralph Hamers will now head UBS, despite shadows of a money-laundering fine of $900 million at ING.

UBS, the world’s biggest wealth manager, has appointed Ralph Hamers to succeed Sergio Ermotti as its chief executive. (Bloomberg)

Hamers is currently CEO of ING, having worked for 29 years at the Dutch bank. He will depart ING as of June 30, join UBS on September 1, 2020, and be designated the Swiss bank’s Group CEO with effect from November 1, 2020.

Hamers earned €1.75m in 2018, compared with Mr. Ermotti’s SFr13.8m (€13m) and had to forgo his bonus in 2018 due to the money-laundering fine. At UBS, Hamers’ pay will increase seven-fold, according to FT.

UBS has shrugged off the scandal and opted instead for his experience in leading a major international bank and pushing through change.

“This was a chapter that ING brought behind itself,” UBS Chairman Axel Weber told Bloomberg Television. “The CEO has led that transformation, he led the settlement with authorities. Let me remind you that one of the first tasks of Sergio and myself at UBS was to settle similar issues.”

This is the second top-level change in Swiss banking this month. Two weeks ago Credit Suisse chief executive Tidjane Thiam lost a boardroom battle and was replaced following a spying scandal.

UBS needs a sure hand at the helm

UBS missed its profitability targets for 2019, leading to lower projections for future periods. Further, the French authorities hit the Swiss bank with a 4.5 billion euro ($5 billion) fine in a tax fraud case. One of Hamer’s top goals at UBS will be to reverse the decline in profitability at its investment bank.

“Ralph is the right CEO to lead our business into its next chapter,” Weber said in a statement. “As the industry undergoes fundamental change, Ralph is the person to lead UBS’s continued transformation”.

Other pressing priorities for Hamers at UBS will be to cut costs, revitalize connections with the ultra-rich, and to modernize the bank’s digital systems.

The instrument of change at ING

At ING Hamers is credited with bringing in a cultural change of informality that was more in line with a tech startup rather than ‘stuffed-shirt’ banking. He radically reinvented how ING conducted its business, spending millions of euros on modernization. He cut the bank’s branch network in Belgium and the Netherlands.

“We completed our restructuring plan and paid back the Dutch State in full,” said Hamers in a statement. “We set the strategic course for ING based on our purpose of ‘empowering people to stay a step ahead in life and in business’.”

On his watch, profits at ING doubled, while the bank transformed from an unwieldy conglomerate to a much more streamlined entity.

ING did not disclose plans for the appointment of a successor to Hamers. “Further announcements on the succession process will be made if and when appropriate,” it said.

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Image of Ralph Hamers credit: Flickr