Deutsche Bank's long-standing overseer steps down next year, sparking speculation around UBS' Axel Weber. The former Bundesbanker enjoys an excellent reputation in Germany. 

In an unusual setup, both UBS and Deutsche Bank – the national champions of Switzerland Germany, respectively – are both poised to elect a new overseer next year. Both Axel Weber at the Swiss bank and Paul Achleitner in Frankfurt will have been in the role for ten years.

While the succession carousel is in full tilt in Germany, UBS's process has been accompanied by far less noise. The Swiss wealth manager said in March that Weber's succession is planned for next spring. The search for his replacement is led by Jeremy Anderson, UBS' vice-chairman, and involves CEO Ralph Hamers.

Unconsummated Advances

Weber's release at UBS registered in Germany: his name circulated as a potential replacement for Achleitner in German media reports. It isn't the first time the German native has been touted.

Ex-Deutsche Bank CEO Josef Ackermann wanted Weber to replace him as CEO back in 2013, a role the former central banker diplomatically eschewed. But Weber's name surfaced in Frankfurt banking circles again in 2018, when Achleitner dumped John Cryan as CEO in favor of Christian Sewing. 

Little Indication Of Plans

As the former head of Germany's Bundesbank (as well as a rare German who is hugely eloquent in both his native language as well as in English), Weber enjoys an excellent reputation at home. Achleitner however seems to have laid the groundwork for his succession with new board directors.

Theodor Weimer appears to be the favorite for now – but would have to give up his current job running Deutsche Boerse. By contrast, Weber could still be nominated, though it isn't clear he wants to be.

Weber has expressed little inclination thus far, people close to him told finews.asia. A spokesman for UBS didn't comment and referred to the excerpt on succession in its most recent annual report.

Wangling For More Time?

In fact, the immediate question around the 64-year-old economist's future is whether he will, in fact, exit next spring. A Swiss outlet traditionally used by UBS' C-suite to air its views last month reported that Weber might add two years to his tenure.

Weber may overstep term limits because the ongoing search has yet to turn up a viable candidate who can get into the job in time, but also because Hamers is under pressure in a revived Dutch money laundering probe during his previous tenure running ING.

Hand Over An Ordered House

Weber, it is clear from within UBS, wants to leave a clean slate for his successor next year. A criminal probe into the company's CEO for alleged money laundering doesn't sit well with that intention.

Hamers aside, UBS is awaiting the ruling on its appeal of a key legal issue – its French criminal trial – and it also still on the hook in the U.S. for allegedly mis-selling mortgage securities (RMBS) in the run-up to the 2008/09 financial crisis. Credit Suisse paid more than $5 billion four years ago in a similar probe.

UBS-Archegos Overshadowed

A more than $800 million loss for UBS from dealings with U.S. family office-hedge fund Archegos should have posed another major problem for Weber – if not for crosstown rival Credit Suisse, which lost $4.7 billion, overshadowing the larger bank's problems.

While Credit Suisse's top executives, including investment banking chief Brian Chin, risk boss Lara Warner, and board risk overseer Andreas Gottschling, stepped down, UBS has taken no notable personnel measures as a result of its Archegos exposure. Where Credit Suisse is investigating, UBS is reviewing the events.

German Merits, Not Millions

When Weber turns 65 next year, he is at the ideal age and stage in his career to take on another prestigious job. A German homecoming would be tempting – especially as Deutsche Bank is slowly showing the fruits of its years-long turnaround.

There is one weighty argument against it: Weber has earned up to 6 million Swiss francs ($6.7 million) annually as full-time chairman of UBS. Achleitner topped out at 900,000 euros ($1.1 million). For Weber to take a 84 percent pay cut for the exact same level of responsibility is extremely unlikely.