The former chief executive of Commerzbank surprised the markets by agreeing a new job at UBS just two weeks after completing his contract – but what looks like a snap decision was two years in the making.
Martin Blessing: from CEO of Germany’s second-largest bank to head of Switzerland's biggest bank
Martin Blessing doesn’t hang around. When he called time on a 15-year career at Commerzbank at the end of April, the 52-year old told Euromoney he had chosen not to sign on for another five years as chief executive at Germany’s second-largest bank because he wanted to take on one last big career challenge while still young enough to throw himself into it.
Pressed by friends and colleagues as to what this might be or when he might take it up, Blessing gave nothing away, apparently fobbing them off with some talk of travel and learning Spanish.
However, clearly he was already talking terms. Indeed, Euromoney understands that UBS approached Blessing two years ago to take another major role at the bank, only to be rebuffed when the German government made clear its expectation that Blessing work out his contract and continue the resuscitation of Commerzbank.
Ermotti says: “With Martin Blessing we gain a professional with a proven track record and significant experience in all areas of the business for UBS. I am certain he will further advance our business in Switzerland and beyond.”
That phrasing suggests that an executive of Blessing’s experience might be a candidate for other roles at UBS.
For the past six years, ex-Credit Suisse banker Gähwiler has drawn praise for his leadership of domestic Swiss business of UBS. In the tough first quarter of 2016, only the signature global wealth management division of UBS made more profit than the domestic bank.
Sources tell Euromoney that Gähwiler told Ermotti at the start of this year, that after six years overhauling the domestic business, working up to 80 hours a week and with a still young family, he wanted to step back. Gähwiler will remain at the bank, in one of those strategic, chairman-style roles, focusing on clients.
Blessing arrives after an extraordinary career at Commerzbank, leading its recovery from state rescue after the financial crisis and focusing it on serving German SMEs while wringing growing profits from a highly competitive German retail market.
In the near term, his experience of managing this impressive feat amid negative interest rates will help him at UBS in Switzerland, where the economy is also challenged by a strong Swiss franc. Shareholders will also hope he can bolster UBS’s position among SMEs.
In the longer term, sources wonder if this really is Blessing’s final career step. Before he took the new role at UBS, sources had talked of Blessing as a possible replacement waiting in the wings for Tidjane Thiam, should the directors and shareholders of Credit Suisse lose patience with their new chief executive.
The board of UBS will be pleased to have a former bank CEO running a major division of UBS, just in case any misfortune befalls the 56-year-old Ermotti. It might be difficult in the short term for Blessing to replace the Swiss as CEO given that, in Axel Weber, UBS already has a German chairman.
However, a new candidate for eventual succession now clearly joins long-serving head of the powerful wealth management division Jürg Zeltner, as well as highly regarded head of wealth management Americas Tom Naratil, and other division heads.