UBS: Ermotti’s golden goodbye means Hamers needs to be humble
The outgoing CEO’s surprisingly good final results mean his successor has less room for manoeuvre.
UBS’s stellar financial performance in the third quarter reinforces its position as the best-performing big bank stock in Europe. This was revealed in the last results announcement by CEO Sergio Ermotti.
With M&A gaining traction across the continent, the boost to UBS’s share price of these unexpectedly good Q3 numbers means the bank is even better-placed to lead this trend, as Ermotti’s successor, ex-ING CEO Ralph Hamers, takes over as chief executive on November 1.
While the Swiss firm is trading at a discount to its equity book value of about 25%, that compares with an average of almost 40% across western Europe and more than 50% in the eurozone, according to research from Citi.
The share-price differential is due to the picture on profit, and therefore dividends, compared with the rest of Europe.
A good financial performance this year at UBS makes it more difficult for the Swiss financial regulator Finma to justify continued restrictions on pay-outs, especially if Credit Suisse and other Swiss banks do well, too.
Hamers was a fantastic communicator and salesman at ING, but he will need to start with a less bombastic tone at UBS
Despite the biggest economic and healthcare crisis for half a century – and when many European peers are posting deep losses – UBS’s profit is up by more than a third in 2020 so far.