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UBS puts wealth management in hands of ex-Commerzbank boss Blessing

FILE PHOTO: Commerzbank Chief Executive Martin Blessing attends the bank's annual news conference in Frankfurt, Germany, February 12, 2016. REUTERS/Ralph Orlowski

By Brenna Hughes Neghaiwi and Michael Shields

ZURICH (Reuters) - UBS has put former Commerzbank boss Martin Blessing in charge of its market-leading wealth management business, sparking speculation that the Swiss bank could be lining him up as an eventual successor to chief executive Sergio Ermotti.

Blessing is taking over the running of the business at the heart of UBS (UBSG.S) from his 50-year-old colleague Juerg Zeltner, who will retire in 2018 after more than three decades at the bank, UBS said in a statement on Thursday.

54-year-old Blessing, who steered Germany's Commerzbank (CBKG.DE) through the global financial crisis, has run UBS' Swiss business since September 2016 and his elevation to the key wealth management role could place him in pole position in the Swiss bank's succession planning, experts say.

Ermotti a 57-year-old former investment banker, has headed UBS since 2011 and has given no signs of wanting to stand down after overseeing a transformation of the bank's fortunes.

"After a certain time in which Blessing can prove he's able to successfully run the most important division at UBS, he's probably in the best position to become Ermotti's successor," Mirabaud Securities analyst Andreas Brun said, adding he could foresee a switch in roughly two years' time.

Prior to joining UBS, Blessing had little Swiss banking experience, although he did study at a Swiss university and Switzerland was one of the first markets outside of Germany where Commerzbank expanded its corporate banking business.

Another German banker, former Bundesbank head Axel Weber, has been chairman of Switzerland's biggest bank for some years.

"There was already speculation that Blessing wouldn't remain the head of Swiss retail banking forever," Zuercher Kantonalbank analyst Javier Lodeiro said.

"This isn't likely to lead to a new strategic direction for wealth management. It will certainly take a few quarters until Blessing's new accents manifest themselves," he added.

Blessing, who was at Commerzbank for 15 years, steered Germany's second-biggest lender through the turbulence that followed its takeover of Dresdner Bank during the financial crisis. He returned Commerzbank to profit and dividends while slashing risky assets and strengthening its capital base.


Zeltner's departure is the second major move in Swiss private banking within weeks after Boris Collardi abruptly quit as Julius Baer (BAER.S) chief executive to join Geneva-based Pictet.

Baer declined to comment on whether Zeltner could be a candidate to replace Collardi as CEO, but Swiss banking sources said it is likely he could appear in another role elsewhere once a cooling-off period with UBS has elapsed.

Zeltner is credited with leading the bank's push into Asia Pacific, which has become an important growth driver for UBS, contributing nearly a third of third-quarter operating income in the wealth management division.

The timing of his departure means he will be able to retain a deferred compensation package, which last year was just under 882,000 shares, worth 15.8 million Swiss francs ($16 million) based on current share prices.

UBS's wealth management business boosted pretax profit by 16 percent in the third quarter as net new money increased. It managed 1.1 trillion Swiss francs in invested assets as of the end of September.

Axel Lehmann, now chief operating officer, will succeed Blessing as the head of UBS Switzerland, while Sabine Keller-Busse will become chief operating officer and also be in charge of human resources.

(Reporting by Brenna Hughes Neghaiwi, Michael Shields and Oliver Hirt; Editing by Amrutha Gayathri/Mark Potter/Alexander Smith)