The largest cantonal bank has fundamentally changed under CEO Martin Scholl, but its top management does not reflect this. Is he leaving too soon?
Martin Scholl will resign as Zurich Cantonal Bank's CEO at the end of August 2022. Tuesday’s announcement was on the cards simply on grounds of age. However, one could argue he might be leaving too soon.
This is because the choice of internal candidates is very limited, a view shared by some ZKB insiders. Those familiar with the cantonal lender say that if the bank’s supervisory board stick to the tradition of an internal succession there are primarily only two potential candidates: head of technology Remo Schmidli and the head of private banking Florence Schnydrig-Moser.
The head of the corporate customer unit since the start of 2020, Juerg Buehlmann’s, chances of landing the job are not considered high.
Lack Of Experience?
However, the disadvantage Schmidli and above all the ideal candidate, Schnydrig-Moser, share is that they have not been on the board of management for very long. Schmidli has only been a member since 2019 and Schydrig-Moser since this month.
The supervisory board would find it very difficult to justify promoting other candidates from the board of management because, apart from Schmidli, Schnydrig-Moser and Buehlmann, the other six members are nearing retirement age.
As a result ZKB's chairman, Joerg Mueller-Ganz is faced with two problems: Finding a successor to Scholl as well as managing change in generations at the top of the bank.
«Thorough Planning»
ZKB told finews.com that the age board of management members was well known and that it was one of the core tasks of the president and supervisory board to look ahead and deal with long-term succession planning for key posts.
The bank did not say that there was a preference for an internal candidate as the new CEO. Succession planning in a sector undergoing rapid change had to be done thoroughly, looking both internally and externally, the bank said.
Major Change Overdue
The change of generations on the board of management gives the supervisory board the opportunity to make major and long overdue changes as the composition of the top management does not match the most relevant business areas.
ZKB is no longer a savings and loans bank as it is sometimes perceived by the public. Its influence and activities have long stretched beyond Canton Zurich: it is a Swiss universal bank with an international character. The 57 branches and the classic savings and loans business no longer generate most of the profits.
Nature Of A Major Bank
Since the takeover of asset manager Swisscanto in 2015, the proportion of the profit generated by commissions has risen to 32 percent. ZKB’s investment banking activities contributed 18 percent.
ZKB’s highly diversified business model, its strength in Swiss investment banking, the strong growth in the investment business and its broader international footprint are down to Scholl.
Failure To Adapt C-Suite
However, as CEO since 2007, Scholl has failed to reflect this diversification in the management structure. ZKB resembles a savings and loans bank with departments such as «products and services» and «corporate customers» more than it does a major Swiss bank.
Scholl is not the only one to blame for the bank clinging on to an antiquated structure, although it would have been down to him to have such important businesses as asset management and investment banking represented within top management.
However, moves like this are also part of the supervisory board’s responsibilities. However, with its highly political nature some of its members still have the outsider’s view of ZKB as the former savings and loans bank of Canton Zurich.
