UBS board considers impact of ING probe on new CEO

Just weeks into his tenure as UBS Group chief executive, Ralph Hamers is facing questions over whether his role in ING Groep’s money laundering scandal will derail his new job.

UBS Chairman Axel Weber is speaking with supervisory board members about how a probe by Dutch prosecutors will affect Hamers’ ability to lead the bank, people with knowledge of the matter said.

Some board members were caught off guard by the court’s decision to investigate Hamers after due diligence during his hiring suggested the scandal was effectively over, the people said, asking not to be identified as the deliberations are private.

Board members have gone as far as informally discussing who could take on the CEO role if the situation with Hamers became untenable, the people said.

“The chairman and the board of directors have expressed full confidence in our CEO,” UBS said in an emailed statement.

Hamers, seen as a surprise hire in February because of his lack of experience in wealth management, only took over as CEO last month. His early weeks have been marred by the decision to open the probe into his role in ING’s past failures to comply with anti-money laundering rules. The matter comes on top of UBS’s own legal troubles, including the appeal of a record 4.5 billion-euro penalty in France, where it’s accused of helping wealthy clients stash undeclared funds offshore.

ING avoided prosecution in 2018 by agreeing to a 775 million-euro ($940 million) settlement and admitting it had failed to comply with anti-money-laundering rules. Koos Timmermans resigned shortly after as chief financial officer, making him the highest profile departure at the bank because of the scandal.

The public prosecutor said in 2018 that it didn’t find enough evidence for criminal accusations against individuals at ING, including the top management.

In the aftermath of the announcement of the Dutch probe earlier this month, both UBS and Swiss regulator Finma said they had conducted due diligence on Hamers at the time of his nomination in February. Finma reconfirmed that it had found him “fit and proper” to run UBS as CEO.

Weber also sent a memo to employees, reiterating what he had said in February, that the bank has “conducted an extensive review of Ralph’s background as part of its evaluation of CEO candidates, including an evaluation of this matter by independent third parties.”

During the CEO search, the bank relied on third parties to conduct due diligence. They worked on behalf of executive search firm Egon Zehnder, who helped place Hamers at UBS, according to Swiss press reports.

While Weber was in talks with Hamers for at least six months, some top managers had privately called the process rushed, people familiar with the matter said in February. The appointment of an outsider passed over possible internal candidates, including newly hired wealth management co-leader Iqbal Khan and then-chief operating officer Sabine Keller-Busse.

[More: Exit of UBS CEO leaves plenty of work for successor]

The post UBS board considers impact of ING probe on new CEO appeared first on InvestmentNews.

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *