UBS, the world's largest bank to the rich, named the head of ING as chief executive on Thursday, seeking to tap his tech knowledge after he transformed the Dutch lender into one of Europe's most successful online banks.
Ralph Hamers' appointment heralds a shift in focus for the Swiss bank, which historically relied on its bankers' personal attention to customers to build a group managing more than $2 trillion of investments.
ING, by contrast, is better known for its brash orange logo, mobile apps and online loan applications. Rock-bottom borrowing rates following the financial crash a decade ago have turned the traditional model of banking on its head, upping pressure on lenders to adopt new technology to cut the cost of doing business.
UBS Chairman Axel Weber hailed Hamers' arrival as the beginning of the next chapter for the Swiss bank. "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," Weber told journalists.
Hamers predicted that artificial intelligence, where computers are trained to make choices on, for instance, what investments to offer customers, would play an ever-greater role in the industry. Hamers succeeds Sergio Ermotti, who has been with UBS for close to a decade. Hamers becomes CEO at the world's biggest wealth manager on Nov. 1 but will join earlier for a handover.
Ermotti, who was named UBS chief in 2011, has earned plaudits for helping rebuild the bank after the financial crisis, with a focus on wealth management.
FINANCIAL GOALS
However, UBS missed its profit and cost targets for 2019 amid ultra-low interest rates in Europe and increased competition from US rivals, forcing Ermotti to dial back some of the bank's financial goals. UBS shares have fallen over the past year, hit by a 4.5 billion euro ($4.9 billion) fine in a French tax fraud case.
Weber said the hunt for Ermotti's successor began in earnest 15 months ago. Hamers' appointment derails speculation that star wealth manager Iqbal Khan, who joined last year from rival Credit Suisse, could be in line to replace Ermotti. UBS is overhauling its flagship wealth management business, including shrinking its senior staff numbers, in the first big strategic move under the division's co-head Khan.
During his stint as ING CEO, Hamers steered the lender to profitability while repaying the Dutch government money it received during the financial crisis. Under his watch, the bank has also invested heavily in its digital transformation, relying far more on its online offering and less on its branch network than most rivals, leading to ING having one of the lowest cost-to-revenue ratios in Europe.
He was, however, criticized after the bank admitted criminals had been able to launder money through its accounts, paying a $900 million penalty. ING did not immediately disclose its plans on finding a new chief but said the succession process will be made "if and when appropriate". Earlier this month, Credit Suisse named Thomas Gottstein as CEO to take over from Tidjane Thiam, who resigned following a spying scandal.
Comments
Comments are closed.