Axel Weber: change and desire

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With his desire for a mega-merger, UBS Chairman of the Board of Directors, Axel Weber, made a 180-degree change. The reasons for this are somewhat clearer than the realistic chances of UBS becoming European champion.

Those who do not adjust their minds when the facts have changed will prove intellectually not particularly agile. TO Axel weber This is certainly not the case.

The Chairman of the Board of Directors of UBS aims to merge the largest Swiss bank with another leading European financial institution. The media has reported this several times in recent days.

Impossible change of direction

Weber has changed his mind about mergers: Just five years ago, the 63-year-old thought that a merger of larger banks would be “more or less impossible.” Last year, Weber suddenly sounded different: Europe needs champion banks that can compete with one of the big American banks in terms of volume.

However, he did not explicitly refer to UBS, which has presided since 2012. A major acquisition or merger would paralyze UBS for years. “Before we want to race, we have to be able to run safely,” he said in early 2019 in an interview with the “Tagesanzeiger.” (paid out).

Now another U-turn: Weber is said to be in acquisition mode with UBS. His term as president expires in two years.

European Champion – of all people, a Swiss

The rank of European champion, which not only the former head of the German Bundesbank dreams of, should be a Swiss institute. You would like to take over Deutsche Bank, a Commerzbank should also be questioned, in France a BNP Paribas or in Great Britain Barclays or Lloyds Bank – or is it Credit Suisse?

With such projects, the change from the central banker who likes to think in larger contexts is perfect. Weber had been an advocate of UBS’s low-risk strategy during his tenure to date.

Do you now want to take the immense risk of a major merger? One can only speculate what facts have changed for Weber, who has fundamentally changed his mind.

Outlook for the European banking union

Weber may have finally been persuaded by consultants who present such “large litters” every two years. UBS spent billions on its very generous platforms, and their volume and organic growth alone cannot achieve economies of scale. The medium-term outlook for UBS may be so bad that only the flight forward promises to save the great Swiss bank from sinking into insignificance.

Perhaps Weber also sees Germany’s EU Council Presidency, which began in July, as a great opportunity for a European banking union to open. German Finance Minister Olaf Scholz placed the subject on top.

A functioning banking union is a prerequisite for bank consolidation in Europe, as then common financial market guidelines and regulations for bank resolution prevail. The irony: so far, it has been mainly banks operating in the German domestic market that have resisted a European deposit guarantee. However, last July, the Federal Constitutional Court of Germany rejected the corresponding complaints against a banking union.

There is movement in it

Italy and Spain show that there has been a movement in the banking scene with the mergers Intesa Sanpaolo-UBI Banca, Santander-Banca Popular and more recently Caixabank-Bankia; These transactions may also have left a mark on Weber.

The fact that Weber’s vision has been made public is more than a miscommunication, another after he took over as CEO two years ago very early. Sergio Ermotti had expressed. Because the merger and acquisition plans seem half-baked and have been received with little enthusiasm.