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Europe’s highest paid banker leaves UBS after nine years. Sergio Ermotti looks back with impressive numbers.
While successor Ralph Hamers is getting used to it, UBS CEO Sergio Ermotti has time for interviews. Let’s start with the recent rumors. UBS is said to be looking to merge with Credit Suisse or another major competitor in Europe, in a mega-merger.
Sergio Ermotti leans back and says: “In Europe, including Switzerland, there are not enough banks in the top league these days. The situation has changed dramatically in the last three decades. That does not correspond to the strength of Europe in the world economy. “
In Europe, including Switzerland, there aren’t enough banks in the top league these days.
From this point of view, an adjustment in the European banking landscape makes sense, says Ermotti. But UBS is in very good health, makes good profits and has no pressure to act: “Today, UBS is strategically and financially very strong, but also in terms of its competitive position. UBS has many opportunities to continue growing. “
The question still arises: What role could UBS play in a wave of mergers, in what is known as consolidation? Ermotti says: “Of course, when consolidation occurs, it is not just about what an individual bank is doing, but also what the competition is doing. With this in mind, we keep all options open. “But he does not comment on what the bank will do in the future because it leaves UBS.
We keep all options open.
A beginning with many works
The outgoing CEO would hardly be so relaxed on the subject chat, a UBS merger is imminent. But enough of the speculation. Let’s look back.
In 2011, Sergio Ermotti took over as head of UBS at the age of 51. Back then, the memory of UBS’s near-death experience, which had been saved with government help at the height of the financial crisis, was still fresh.
Less investment banking, more asset management
Ermotti had to get the bank back on track. Reduced the size of venture investment banking. He reorganized UBS as a global asset management bank, with a strong presence in the Swiss domestic market.
UBS strengthened its capital base to make it less vulnerable to shocks. He set out to deal with legacy issues and litigation, which cost a lot of money. The management also had to regain confidence in the bank, among clients, investors and politicians. It is not an easy task.
Hard times with a lot of negative energy
“These were difficult times with a lot of negative energy at the bank. Over time we have re-created positive energy. In this sense, after a few years, many in the media and especially in the industry have been telling the other banks that they should do it to UBS. “
Ermotti is proud of that. However, what it did not achieve was to significantly and sustainably increase the share price. Stocks are doing well compared to their direct competition. However, the course is disappointing.
Share price and forgetful shareholders
Ermotti admits that he would have preferred otherwise. But at the same time he states: “UBS shares are almost the same today as when I started. I want to express in numbers what has changed in the last nine years: we made 35 billion profits. We paid 18 billion in dividends to shareholders. We had to pay twelve billion for contaminated sites. We have reduced risks and improved capital. “
With the listing, Ermotti expresses what is not reflected or only incompletely reflected in the share price. Some shareholders have little memory, he adds: “What has been collected is forgotten.”
Some shareholders have little memory. The collected is forgotten.
The highest paid banker
When it comes to revenue, how can double-digit millions of annual salaries for top bankers be justified? Ermotti says: “From the beginning I only did what filled me up. The pay was a consequence of my work. My priority has always been: I am paid the same as my colleagues or competitors who do the same. “
Here’s what the man says, who recently emerged again from a survey of top earners as the highest paid banker in Europe.
