UBS rules out external successor to chief Sergio Ermotti – Financial Times

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UBS is not looking to appoint an outsider to succeed Chief Executive Officer Sergio Ermotti, and will choose from among three internal candidates when he steps down in about three years.

The Swiss bank has decided not to look outside the group for its future leader and could reveal the identity of a potential successor as early as next year’s annual general meeting, according to people familiar with the plans.

The candidate is expected to be selected from the current executive committee and may be given additional responsibilities or have his or her role modified to allow him or her to gain experience before succeeding Ermotti.

“The idea is to give them broader powers,” said a person familiar with the plans. “They need time to prove themselves.”

Mr Ermotti returned to UBS as chief executive just a year ago, just days after the bank rescued arch rival Credit Suisse following a forced marriage orchestrated by Swiss authorities.

Mr. Ermotti, a 64-year-old former investment banker, had committed to spending three to five years in the role overseeing the three-year integration of Credit Suisse and developing a growth strategy for the combined group, according to people briefed on the deal. Mr. Ermotti would also be tasked with developing a successor.

UBS Chairman Colm Kelleher kicked off the succession race last year when he told the Financial Times banking summit that the bank was considering following the example of his former employer, Morgan Stanley.

Morgan Stanley had several internal candidates to replace longtime CEO James Gorman when he retired last year, but ultimately chose Ted Pick, who announced on Thursday that he would step down as chairman at the end of 2024.

But UBS’s organizational structure differs from that of Morgan Stanley, which allowed Pick and another nominee, Andy Saperstein, to share most of the responsibilities of the group as co-presidents.

At UBS, division heads sit on the group executive committee and report directly to the CEO.UBS’s board had been considering tweaking its structure or changing senior roles to better prepare potential successors, according to people briefed on the discussions.

The shortlist has yet to be finalised, but it is expected to include Iqbal Khan, head of UBS’s most important division, asset management.

Rob Karofsky, head of investment banking, is also seen as a strong candidate, as is Bea Martin, who oversees UBS’s non-core and legacy division, which is responsible for disposing of and winding up parts of Credit Suisse that it deems undesirable, and who was recently given additional oversight of sustainability.

Sabine Keller-Busse, who heads UBS’s Swiss operations, is also seen as a leading candidate.

While UBS’s board is developing a succession plan, management is focused on integrating the two businesses, including merging the entities by the end of May.

Ermotti is also focused on negotiating with Swiss authorities over new regulations that could include extra capital requirements, which UBS opposes.

UBS declined to comment.