UBS boss says Switzerland is falling behind on structural change

Cleaning up: Ralph Hamers reckons people trust bankers again © Keystone / Christian Beutler

Swiss banks have some catching up to do when it comes to structural change and digitalisation, says Ralph Hamers, CEO of Swiss bank UBS. In his opinion structural change has taken place much faster in other countries and industries than in Switzerland.

For example, the dynamics in Asia and Scandinavia are significantly greater, Hamers told newspaper BlickExternal link in an interview on Monday. Also in the Netherlands, Hamers’ home country, the public now does everything digitally, from shopping to banking, he said.

“This also has to do with the culture,” he said. “UBS has almost three million clients in Switzerland. We don’t want to force them to do anything they don’t want to do. The step towards digitalisation only works together.”

The Covid-19 pandemic has dispelled many reservations about digitalisation and accelerated it, he added.

Archegos debacle

Regarding structural change, Hamers said it was not always possible to avoid redundancies, “but at the same time [there are] new jobs and retraining”. The bottom line, for him, is that the number of employees remain roughly the same.

“We need employees who want to be part of the technological change. And we need specialists who are familiar with artificial intelligence and data.”

Hamers, who has been in office since November 2020 and replaced Sergio Ermotti, believes banks are in a much more stable position today following the Archegos debacle, in which UBS took an $861 million (CHF790 million) hit. Archegos, a family office which imploded in March, borrowed tens of billions of dollars from at least nine global banks to speculate on volatile stocks.

Banks today have significantly more capital cushion and liquidity, Hamers said.

“People trust bankers again,” he claimed.

Hamers’ legal woes

UBS said in January that board members were backing Ralph Hamers as he faces a lengthy Dutch legal battle over his role in a money-laundering scandal at his previous employer that has complicated efforts to put his stamp on the business.

Hamers, hit with a probe by the Dutch public prosecutor barely a month after taking over in November, faces an investigation that was expected to drag on for at least a year from the formal start of the process in February, according to Bloomberg who spoke to people familiar with the matter who requested anonymity.

Switzerland’s largest bank is contending with the risk that Hamers could be indicted for breaching anti-money-laundering and compliance rules while at the helm of ING Groep NV. That represents a second major legal issue, as the bank seeks to appeal a record fine for helping French clients dodge taxes.

Chairman Axel Weber has said he is confident that Hamers will make a good CEO, while declining to predict whether he can stay on. Before Christmas, UBS’s directors had gone as far as discussing possible contenders to replace Hamers in a worst-case scenario.