Weber Move to UBS Puts Onus on Deutsche Bank for Succession
Axel Weber’s decision to join Switzerland’s UBS AG (UBSN) robs Deutsche Bank AG (DBK) of a potential replacement for Chief Executive Officer Josef Ackermann and adds to pressure on Germany’s biggest bank to map out a succession plan, investors said.
UBS, Switzerland’s largest bank, plans to appoint former Bundesbank president Weber as chairman in 2013, the Zurich-based company said today. The 54-year-old Weber, who was a candidate to lead Deutsche Bank, told Ackermann and supervisory board Chairman Clemens Boersig that he’d be joining the Swiss bank before today’s announcement, a person with knowledge of the matter said.
With Weber out of the running for top posts at Deutsche Bank, the focus returns to internal candidates such as Anshu Jain, 48, who heads the corporate and investment bank and oversees the largest share of revenue, and Chief Risk Officer Hugo Banziger, 55. Investors including Hermes Equity Ownership Services, which represents more than 20 pension funds and asset managers, have urged the Frankfurt-based bank to pick a replacement for Ackermann, whose contract expires in 2013.
“The issue of succession had quieted down and now the questions arise again,” said Lutz Roehmeyer, who helps manage about $18 billion at Landesbank Berlin Investment in Berlin.
While Weber wasn’t the “preferred candidate” of investors because of his lack of experience running a commercial bank, questions remain about Jain’s ability to fulfil the “political component” of leading one of Germany’s most important financial institutions, Roehmeyer said.
Ackermann’s Greece Role
That role was on display yesterday, when Ackermann stood beside German Finance Minister Wolfgang Schaeuble in Berlin to announce an agreement by the country’s banks and insurers to roll over Greek debt holdings, helping to prevent the euro region’s first sovereign default. Ackermann, 63, has run the bank since 2002.
Armin Niedermeier, a Frankfurt-based spokesman for Deutsche Bank, declined to comment when contacted by Bloomberg News.
Deutsche Bank advanced 36 cents, or 2.4 percent, to 15.69 euros in Frankfurt trading today, bringing the gain this year to 6.9 percent.
Boersig, who is leading the search for a successor, said at Deutsche Bank’s shareholder meeting on May 26 that the process is proceeding in a “clear, structured” way and the supervisory board will make a decision at the appropriate time.
Hermes Equity Ownership Services said before the annual meeting that the current approach and public debate “harm not only potential candidates but in particular Deutsche Bank as a company,” according to a letter to Boersig that was obtained by Bloomberg News.
Weber may have decided to look for other jobs after Boersig hesitated to make a formal offer, raising doubts about his chances for the top post, Spiegel reported on its website, without saying where it got the information. He met with UBS Chairman Kaspar Villiger in Zurich on May 10 and six weeks later was presented to the bank’s executives in New York, the magazine said.
Weber, a German national, was the president of the Bundesbank from April 2004 to April 2011 and a member of the European Central Bank’s Governing Council. He was a frontrunner to succeed Jean-Claude Trichet as president of the ECB until he announced his departure from the Bundesbank in February.
Boersig, 62, had talks with Weber about possibly joining Deutsche Bank, a person familiar with the matter said today. He was also considered as a potential co-chief executive alongside Jain, to assuage concern in Germany over having an investment banker and non-German speaker as sole head of the company, people familiar with the matter said in May.
“Jain is probably the only person who doesn’t benefit from this, as it reduces the chance of having dual leadership,” said Christian Hamann, an analyst at Hamburger Sparkasse who recommends investors hold Deutsche Bank stock. “I would’ve been more worried if Weber had gotten the job at Deutsche, because it would mark the arrival of yet another outsider.”
Weber asked the Bundesbank for permission to join UBS, as is required under his contract, and the request will be considered at a meeting on July 12, the Frankfurt-based central bank said in a statement today.
Joining a Swiss bank may make it easier for the Bundesbank’s board to approve the switch from central banking to a commercial lender without any concerns about a conflict of interest. In his capacity as Bundesbank president, Weber was also in charge of supervising the country’s lenders.
Jain, Banziger, Neske
Weber would make a better chairman than CEO because he has political and regulatory connections and lacks commercial banking experience, analysts said in February, when speculation arose that he might succeed Ackermann.
While Ackermann’s contract runs until the spring of 2013, he may leave earlier and could designate a successor by the end of this year, people familiar with the matter have said. Deutsche Bank has qualified internal candidates including Jain, Banziger, and consumer-banking chief Rainer Neske, 46, and isn’t in a rush to pick a successor, according to a person familiar with the supervisory board’s deliberations.
Deutsche Bank’s board failed to agree on a successor in 2009, and instead extended Ackermann’s tenure for three years. Boersig put himself forward as Ackermann’s replacement and was rebuffed by labor union representatives on the board, people familiar with the matter said at the time.
Under one scenario, Ackermann may consider taking over the supervisory board as chairman to steer the selection of a new CEO, one of the people said. In that position, he could select someone like Jain as sole head or as a co-head alongside retail banking head Neske, or a different candidate, the person said.
Ackermann has previously said he’s not interested in becoming chairman.
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