UBS, Deutsche Bank Set Course for Next Era With New Chairmen

(Bloomberg) -- Two of Europe’s banking giants picked the leaders who’ll help chart their next era as they named successors for the chairmen who steered them through a decade of restructuring.

UBS Group AG on Saturday nominated former Morgan Stanley President Colm Kelleher to succeed Axel Weber as chairman next year. A day earlier, Deutsche Bank AG proposed Dutch insurance veteran Alexander Wynaendts for the same role, replacing Paul Achleitner.

Achleitner and Weber are set to step down after leading the banks through a period of major upheaval. The chief executive officers they helped pick -- Deutsche Bank’s Christian Sewing and UBS’ Ralph Hamers -- are both expected to provide strategy updates early next year, setting a path for growth as ebullient markets and the potential for higher interest rates provide a rare tailwind. 

Deutsche Bank touted Wynaendts’s tech savvy and experience dealing with regulators, as Germany’s largest lender looks to revamp its digital platforms and improve its standing with authorities after costly misconduct fines. UBS, which tapped its own Dutch executive evangelizing digitalization with last year’s hire of Hamers, turned to a Wall Street veteran whose previous firm found success with the UBS model of a giant wealth management unit and an investment bank focused on stock trading. 

Shares of UBS rose 0.4% at 9:16 a.m. in Zurich trading, while Deutsche Bank was little changed in Frankfurt.

Both firms have been reshaped over the past decade, but they enter their next phase from very different starting points. UBS has returned to strong levels of profitability and its shares trade on par with the book value of its equity, one of the few major European banks to do so. Deutsche Bank only recently posted its first profit in six years, and still trades at a 60% discount to its book value. 

The biggest banks in Germany and Switzerland -- which have faced political scrutiny at home in recent years -- prioritized relevant financial expertise over national ties in turning to the Dutch and Irish executives. And both men have extensive experience in the U.S., where European banks have consistently lost share to stronger American rivals since the financial crisis. 

Deutsche Bank did nominate Norbert Winkeljohann, a German who serves as Bayer AG’s chairman, as vice chairman. UBS followed a similar model by proposing Lukas Gaehwiler, currently chairman of the board at its Swiss unit, for the same position. 

Together with Antonio Horta-Osorio -- a native of Portugal who ran a British bank before replacing Urs Rohner as Credit Suisse Group AG chairman earlier this year -- they represent a new era for the traditional powers in European investment banking. 

The two handovers aren’t set to take place until annual shareholder meetings in the spring, but both firms had aimed to have candidates in place well ahead of time to ensure a smooth transition.

Deutsche Bank on Sunday also moved to fill the other major role that’s set to open next year when it hired Olivier Vigneron from Natixis SA as its next chief risk officer. Stuart Lewis, who currently holds that role and is the firm’s longest-serving management board member, had already announced his intention to leave in 2022. 

“The supervisory board has now addressed the open questions in the bank’s leadership team,” Sewing said Sunday in a message to staff. “This clarity gives us further impetus on the path towards achieving our goals and becoming sustainably profitable.”

Wynaendts, 61, ran Dutch insurer Aegon NV for 12 years before leaving in 2020. Aegon typically gets the majority of its profit from the U.S., where it owns the insurer Transamerica. Wynaendts worked at ABN Amro’s investment banking and private banking units before joining Aegon in 1997. In 2019, he joined the board of Citigroup Inc., which he will leave before taking on the Deutsche Bank role.

“Alex’s arrival will mark the end of an era,” Sewing wrote to employees. Achleitner’s “leadership has played a major role in enabling the successful transformation of our bank.”

Kelleher, 64, spent three decades at Morgan Stanley, where he served as chief financial officer and ran the trading business before rising to president. One of nine siblings who grew up in Ireland’s County Cork and an Oxford University graduate, he helped Morgan Stanley’s investment bank rebuild client confidence after hedge funds pulled money during the crash.

The appointments will do little to change the stark lack of diversity at the top of European banking. Ana Botin of Banco Santander SA is the only woman among the chairs and CEOs of the 10 biggest lenders on the continent, and there are no minority executives among their ranks. Weber had suggested in May that UBS should consider appointing a woman after he exits next year, as the bank seeks to address a lack of gender diversity on its board. 

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