Deutsche Bank and UBS send these signals with their top personalities

Frankfurt Deutsche Bank and the major Swiss bank UBS set the course with three surprising top personalities at the weekend: At Deutsche Bank, the former head of the Dutch insurance giant Aegon, Alexander Wynaendts, is to succeed Paul Achleitner, chairman of the supervisory board. The supervisory board approved the nomination committee’s proposal on Sunday.

By filling the three key positions with Wynaendts, Vigneron and Kelleher, the two major banks are also sending important signals as to which priorities they want to set in the future.

With the designated chairman of the supervisory board Wynaendts and head of risk Vigneron, Deutsche Bank is bringing in two external managers who are not closely linked from the outset to Achleitner, chairman of the board, Christian Sewing, or Deutschland AG, the tightly knit network of German top managers. The filling of important positions with confidants of Achleitner and Sewings caused a certain unease in the past, at least for some investors.

With the appointment of a Dutchman to the top of the supervisory board and a Frenchman as head of risk, the money house is also underpinning its European ambitions. As the son of a Dutch diplomat, Wynaendts has traveled a lot around the world and is particularly familiar with the Asian market, which is important for Deutsche Bank. In Germany, especially in German politics, it is considered to be barely wired.

This fact is considered to be a weakness of his calling. It is noticeable that at the same time as Wynaendts’ appointment, the bank announced that Norbert Winkeljohann, former head of the German auditor PwC and close confidante of Achleitner, is to become the second deputy head of the supervisory board of Deutsche Bank.

There are also other stock corporations that elect an employee representative as well as a capital representative as vice, but this has not been the case at Deutsche Bank so far.

With the appointment of Wynaendts, Deutsche Bank is also indirectly cementing the extremely strong position of its CEO Christian Sewing, who remains the undisputed face of the Institute for Politics and Economics in his home market. According to this logic, Sewing would be the undisputed king in the home market, and Wynaendts would be the foreign minister who is supposed to ensure a better standing of the institute with the American authorities in particular.

Criticism from Union Investment

Not all investors are already convinced of Wynaendt’s personality: For Janne Werning, Head of ESG Capital Markets & Stewardship at Union Investment, the nomination is “a surprise from an investor’s point of view”. The designated chairman of the supervisory board has so far been “hardly known” in Germany, according to Werning. “It is not evident from his previous positions that he is familiar with German corporate governance. He also never ran a large bank himself, ”he complained.

The banking business is not entirely unknown to Wynaendts: So far, the Dutchman has also sat on the board of directors of the US bank Citigroup. Before joining Aegon, he worked for the major Dutch bank ABN Amro for many years, where he was considered a specialist in the takeover and integration of other companies. Because of this M&A expertise, Aegon brought him on board in 1997, and he became its boss in 2008.

As head of Aegon, Wynaendts was involved in a total of 87 takeover and merger transactions. But even though he brought the company back into the black, the stock ultimately lost around 80 percent of its value during his long tenure, as one investor critically notes. In any case, Aegon is not a role model for Deutsche Bank on the cost and efficiency side.

From the point of view of fund manager Werning, the decision comes too late: “And we would have definitely wished for an adequate familiarization period for an external successor,” said Werning to the Handelsblatt. Wynaendts will not be elected to the bank’s supervisory body until the 2022 Annual General Meeting. At this point, the bank will have already presented its new strategy.

Natixis is the new head of risk

With the appointment of Olivier Vigneron, Deutsche Bank also arranged the successor for its risk manager Stuart Lewis at the weekend. The Frenchman had started his career as a derivatives trader and only switched to the risk side in 2012. At the time, he was working as a trader for Wall Street giant JP Morgan and, as part of a four-person special force, helped deal with a trader scandal that had cost the bank six billion dollars. Because of the size of the positions, one of the responsible traders was nicknamed “London Whale” in the financial markets at the time.

Vigneron’s qualities as a firefighter were the reason that Natixis named him Chief Risk Officer in 2020 after the risk management of the investment house came under massive criticism: An offshoot of the fund subsidiary Natixis Investment Managers with the name H2O had invested more than a billion euros in illiquid investments related to the controversial German investor Lars Windhorst.

There is no acute fire service at Deutsche Bank. The successor for Stuart Lewis is still important: The bank’s risk management has a good reputation in the industry for dealing with credit and market risks. Lewis played an important part in that. He is the only pre-Sewing board member still in office.

Because the institute has always skilfully avoided serious losses in the lending business in recent years. And during the European sovereign debt crisis, it was one of the few to part ways with Italian government bonds in time. For a long time, the bank did worse in terms of operational risks, which are relatively high due to high fines following fraud scandals.

Again no Swiss for UBS

The major Swiss bank UBS also made important decisions with the appointment of Colm Kelleher, whom some investors would have liked to see headed the Deutsche Bank Supervisory Board. The financial investor Cerberus is said to have submitted this proposal. However, Kelleher has a reputation for interfering strategically. For a Swiss head of the board of directors this is part of the job description, but in the team with the power-conscious Deutsche Bank boss Sewing it would inevitably have led to tensions.

But Kelleher’s appointment is also a surprise for UBS. It breaks with the unwritten rule that either the office of CEO or Chairman of the Board of Directors of the largest Swiss bank is held by a Swiss citizen.

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However, this convention had already been suspended since Ralph Hamers was appointed head of UBS. However, some observers in Zurich had relied all the more on a Swiss solution for Weber’s successor. Because there is no longer a Swiss manager at the helm of UBS for the foreseeable future.

Instead, UBS decided to take an unusual step: it appointed Lukas Gähwiler, previously Head of the Board of Directors at UBS Switzerland, as Vice Chairman of the Group Board of Directors. Usually a manager who does not belong to the group takes on the vice position.

The new management structure underscores UBS’s global ambition – and the ambition to close the gap with US banks. Weber made no secret of his admiration for Morgan Stanley. The outgoing chairman of the board of directors has always been worried about the discount in the stock market valuation of UBS compared to the US competition. Weber’s vision for the future was therefore to convert UBS into a kind of “green” Morgan Stanley. When it comes to sustainability, the Swiss already think they are ahead of the US competition.

More: The new Chairman of the Supervisory Board of Deutsche Bank has many strengths – and two weaknesses

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