MUNICH—Well-respected German central banker and economist Axel Weber last week decided to take the post of chairman at Swiss banking giant UBS AG; a decision that dealt a blow to Deustche Bank AG, Germany’s biggest bank.
Weber was the strongest candidate to replace the aging Joseph Ackermann, who has served as Deutsche Bank’s CEO for the last 10 years. This move practically leaves Deutsche Bank without a worthy successor to lead the biggest private bank in Germany, and one of the biggest in the European Union.
When it comes to banking, Axel Weber is one of the most knowledgeable bankers on the planet. After he received his doctoral degree from the University of Konstanz (Germany), he started a teaching career as a professor at various German universities concentrating on international finance and economic theory. In 2004 he decided to get his hands dirty with practical work and embarked on an impressive banking career. From 2004 to 2011 he was the president of the German Bundesbank, the biggest and by far the strongest member of the European Central Bank.
Known for his superior banking know-how and decision making, he was also the most expected successor of Jean-Claude Trichet, president of the European Central Bank (ECB). However, earlier this year he pulled out of the race and left Bundesbank altogether, sources said, as he didn’t think the eurozone was heading in the right direction.
"Axel Weber is one of the smartest bankers on this side of the Atlantic," said Florian Esterer, who is senior portfolio manager at Swisscanto, managing 58 billion Swiss francs (US$69 billion) in assets and holds UBS shares worth more than $180 million.
"He knows banking inside out. It could work out very well for UBS. We think this is a smart move," Esterer wrote in a research note.
After being free on the job market, Deutsche Bank was looking forward to recruiting Weber, but failed to make an official offer while contemplating between other internal candidates, reported German magazine Spiegel.
In May Weber met with Kaspar Villiger, the chairman of UBS in Zurich, Switzerland, to discuss non-job search-related issues and hinted that he is looking for a challenging job. The Swiss, known for their precision and perfect timing, made a quick and nonbureaucratic maneuver to recruit Weber and passed him an offer. Having an offer in hand from UBS, it didn’t take long for Weber to make a decision to join the Swiss bank.
The move to UBS automatically detaches him from the woes of the eurozone, as the “cheese” currency state has been practically immune to any regional financial instability during the last few centuries.
"UBS is a dynamic global financial services provider with traditional European roots. Being able to help shape the bank’s future is an attractive prospect, and I look forward to working together with the board, the management team, and CEO Oswald Grübel. Going forward, stability and a long-term strategic outlook are key. The successful path that has already been forged, the strong global client base, and the balanced business model provide a good basis," said Weber after the announcement of his chairmanship in a statement.
For UBS, this is a hat trick win, as they got the best possible candidate to replace Kaspar Villiger whose contract will soon end. Besides excellent banking experience and knowledge, Weber is also bringing with him a well-connected network of politicians and key decision makers, which would help UBS immensely to reshape its international regulatory policies.
"With Axel Weber’s nomination, I am pleased that I can present a board member and future chairman who is an internationally renowned personality with an outstanding reputation. He has extremely broad expertise in international finance and banking as well as strong leadership experience. His appointment will guarantee a smooth leadership transition and stability. I am convinced that his background and skills will be invaluable to UBS," commented Kaspar.