The decision by Lukas Gaehwiler to give up his job as head of UBS Switzerland and to see it being handed to a German banker has been met by surprise on the Swiss financial market.

In the recent past, Lukas Gaehwiler frequently mentioned to people in his proximity that he wanted to take on a new challenge. Gaehwiler has been in charge of the Swiss business for more than six years, following the call of the then UBS boss Oswald J. Gruebel. Gruebel and Gaehwiler previously worked for rival banking giant Credit Suisse (CS), where they forged a special bond. Gaehwiler once had declined an offer for promotion by Gruebel, prompting disappointment but also respect in equal measure.

When Gruebel asked Gaehwiler to take the Swiss top job, he knew that he couldn't resist for a second time. He took over at the time when the company was in its deepest-ever crisis and contributed to a very substantial part to put the country's No. 1 bank back on track.

Under his guidance, the Swiss business generated half of the company's profit. Gaehwiler at times found it difficult to accept that this contribution didn't receive the public acclaim he thought it deserved, not least because the bank attracted the international limelight because of the wealth management and investment banking – and not always for the best of reasons.

Winning Back Trust

But Gaehwiler managed to win back the trust of his clients, who had disowned the bank following the excesses of the previous management – which was no mean feat for the banker from eastern Switzerland. He managed not only to bolster the bank's image, he also continuously improved the profitability of the unit, renovated bank branches and digitalized the business at an early stage.

Customer satisfaction rose markedly and new clients were won – rewarding the efforts of the Swiss unit. It all happened at breakneck speed and in the knowledge that such a job required tough decisions and the acceptance of the fact that he couldn't make everybody happy. Gaehwiler felt a little isolated at times.

A New Legal Structure

Gaehwiler's most important contribution however was the implementation of a new legal structure at UBS Switzerland, an giant effort that is designed to prevent a second bailout by the state. Some 2,000 staff were involved in the implementation.

With all this achieved, Gaehwiler sensed that it now might be the time to draw a line and think about his own, personal future. He has three children at an age, where they are happy to do things with their parents. The banker found it appealing to take some time to develop new ideas as he put it in talks with his colleagues.

Surprising His Boss

The wish to change took the UBS management by surprise, not least CEO Sergio Ermotti who enjoyed a formidable bond with his country boss. Ermotti decided to create the strategic function of chairman for Switzerland to try and retain the know-how of Gaehwiler.

Unlike many other bankers, Gaehwiler is modest in the way he behaves, has excellent contracts to business leaders in Switzerland, to politicians and the administration in Bern. Having Gabi Huber, a liberal politician with decades of experience, as member of the board of UBS Switzerland is the doing of Gaehwiler.

Culture Shock

Martin Blessing 501

Making a German successor to Gaehwiler will certainly have surprised many employees at the Swiss unit, may even have caused a sort of culture shock. But looking for a successor, it quickly became evident that there was no suitable candidate among the management, which was why UBS opted to appoint Martin Blessing (pictured above).

It was Axel Weber, the bank's chairman, who got in touch with the best managers in his home country and found a highly qualified man with whom he has had a lot of contact already.

Blessing: at Home in the Taunus

Both their families are based in the Taunus, Frankfurt's hilly backyard, and they had a lot of contact when Weber was head of the German Bundesbank and Blessing the CEO of Commerzbank. Blessing kept his institute alive thanks to taxpayers' money.

The thinking behind the most recent appointment in UBS' history is best summarized by an internationally active headhunter: «To look at the nationality of a candidate when attempting to fill a vacancy at a time when the globally active financial industry is redefining itself, would be reckless.»