December 4, 2021, 8:22

    UBS foreign chair ticks more boxes than Deutsche’s

    UBS foreign chair ticks more boxes than Deutsche’s

    LONDON, Nov 21 (Reuters Breakingviews) – Globalisation is alive and well in the boardrooms of Europe’s investment banks. UBS (UBSG.S) and Deutsche Bank (DBKGn.DE) on Saturday and Friday respectively nominated an Irishman and a Dutchman as their new chairs. The Swiss bank’s pick, former Morgan Stanley (MS.N) President Colm Kelleher, ticks more boxes than the German lender’s choice of Alexander Wynaendts, previously the boss of insurer Aegon (AEGN.AS).

    Kelleher has the right résumé for the world’s largest wealth manager. He was pivotal in the Wall Street firm’s strategic swivel towards the business after the 2008 financial crisis. His last role involved getting private bankers and dealmakers to work together, a central task for UBS. Doing it better could narrow the $60 billion bank’s valuation gap with Morgan Stanley, which is valued at 2.4 times its forward tangible book value, more than double UBS’s multiple.

    The appointment breaks an unwritten rule that one of UBS’s two top jobs should go to a Swiss national: Kelleher will work alongside Dutch CEO Ralph Hamers. But Vice Chair Lukas Gaehwiler is well-known in Zurich. In any case, UBS earned almost twice as much revenue in the Americas last year as it did at home.

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    Wynaendts is a less obvious choice for Deutsche. The Dutchman’s last banking job ended in 1997. Admittedly, he has served on Citigroup’s (C.N) board since 2019, and insurers are major counterparties for fixed-income traders, one of the German group’s most important businesses. Deutsche’s retail bankers will also be pleased to learn that a key strategic push at Aegon was upgrading IT systems to make better use of customer data.

    Even so, Wynaendts will be a newcomer to Germany’s clubby financial establishment. Deutsche’s home market is also more important, bringing in almost twice as much revenue last year as the Americas. One of the key questions facing Deutsche is whether to revive a merger with state-backed Commerzbank. The country’s likely next chancellor, Olaf Scholz, was heavily involved in the last attempt. Deutsche CEO Christian Sewing and Vice Chair Norbert Winkeljohann will have to do the heavy lifting on government relations.

    Wynaendts was partly selected because of his M&A experience at Aegon, which bought and sold businesses during his tenure. He’ll face a steep learning curve in Frankfurt.

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