Swiss UBS starts a new chapter with a Dutch tech innovator as boss


ZURICH/AMSTERDAM (Reuters) – UBS UBSG.Sthe world’s largest bank for the rich, was appointed head of ING INGA.AS as chief executive on Thursday, trying to use his technical knowledge after transforming the Dutch lender into one of Europe’s most successful online banks.

Ralph Hamers’ appointment heralds a shift in focus for the Swiss bank, which has historically relied on the personal attention of its bankers to build a group that manages more than $2 trillion in investments.

ING, on the other hand, is better known for its eye-catching orange logo, mobile apps, and online loan applications.

Rock-bottom lending rates after the financial crash a decade ago have upended the traditional banking model and put pressure on lenders to use new technology to lower the cost of doing business.

UBS President Axel Weber hailed Hamers’ arrival as the start of the next chapter for the Swiss bank.

“Under his leadership, ING has made a fundamental change in its operating model and is now recognized as one of the best examples of digital innovation in the banking sector,” Weber told journalists.

Hamers predicted that artificial intelligence, which involves training computers to make decisions such as which investments to offer clients, would play a growing role in the industry.

FILE PHOTO: Ralph Hamers presents ING’s annual results during a news conference in Brussels February 13, 2013. REUTERS/Francois Lenoir

Hamers succeeds Sergio Ermotti, who has been with UBS for almost a decade. Hamers will become CEO of the world’s largest wealth manager on November 1, but will advocate an earlier handover.

Ermotti, who was appointed UBS chief in 2011, was praised for helping to rebuild the bank after the financial crisis with a focus on wealth management.

FINANCIAL GOALS

However, UBS missed its profit and expenses targets for 2019 amid ultra-low interest rates in Europe and increasing competition from US peers, forcing Ermotti to scale back some of the bank’s financial targets.

UBS shares have fallen over the past year after being fined 4.5 billion euros ($4.9 billion) in a French tax fraud case.

Weber said the hunt for Ermotti’s successor began in earnest 15 months ago. Hamers’ appointment derails speculation about star wealth manager Iqbal Khan, who joined from rival Credit Suisse last year CSGN.Scould replace Ermotti.

UBS is overhauling its flagship wealth management business, including reducing the number of its senior staff, in the first major strategic move under division co-head Khan.

During his tenure as ING CEO, Hamers led the lender to profitability while repaying Dutch government funds he received during the financial crisis.

Under his watch, the bank has also invested heavily in its digital transformation, relying far more on its online offering and less on its branch network than most of its competitors, resulting in ING having one of the lowest cost-to-sales ratios in Europe .

However, he faced criticism after the bank admitted criminals could launder money through its accounts and had to pay a $900 million fine.

ING did not immediately reveal its plans to find a new boss, but said the succession process would be carried out “if appropriate”.

Earlier this month, Credit Suisse appointed Thomas Gottstein as CEO to take over from Tidjane Thiam, who resigned following a spy scandal.

($1 = 0.9252 euros)

Additional reporting from Shubham Kalia in Bengaluru; Writing by Rachel Armstorng and John O’Donnell Editing by Kim Coghill and David Holmes

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