UBS (UBS) made its temporary appointment of Sergio Ermotti as CEO permanent on Tuesday as it sought to reassure investors in the wake of a $2 billion trading scandal. The firm also advanced the start date of Axel Weber, designated to be chairman, continuing the changes at the top that had been capped with the resignation of Oswald Grueber in September.
Reuters reported that Ermotti (left) had held the CEO slot as a temporary measure after Grueber's departure, as previously reported by AdvisorOne. An outside search was conducted for a successor, but after its conclusion the board said its decision instead was to keep Ermotti in place "after it completed a comprehensive evaluation process."
Weber, former president of Germany's Bundesbank, has advocated since the fraudulent trade losses were uncovered that he join the bank as quickly as possible. Originally scheduled to be proposed as chairman in 2013, now his candidacy will be proposed in May 2012, a full year ahead of schedule.
Sources said Weber originally viewed Ermotti as a fallback option and looked to find other candidates for the CEO slot. However, he was quoted saying, "I know Sergio Ermotti personally. I had previously met him during my time at the Bundesbank. I have also spoken to him often in the last few weeks. I welcome his appointment as UBS' Group CEO and look forward to working together with him." Weber plans to go to Switzerland in February, where he will meet with major clients and talk with his new colleagues.
Ermotti is expected to present UBS' new strategy of cutbacks in its investment bank and a focus on its core wealth management business to attendees at an annual New York investor event on Thursday.
He issued a statement that said in part, "This strategy will be centered on our leading wealth management businesses and our position as the strongest universal bank in Switzerland. A focused, less complex and less capital-intensive investment bank and our asset management business are also key elements for growing our wealth management franchise."
It is hoped that Ermotti can restore confidence among the bank's wealthy private clients, as well as reduce the size of the investment bank in compliance with new regulations designed to curb risky activities.