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Face to Face with Jürg Zeltner

‘I don’t run [UBS wealth] for good media coverage’

By Laura Noonan

UBS wealth management boss Jürg Zeltner is 20 minutes late. He has apologies at the ready and the perennial good excuse of a banker: he was with a client.

Mr Zeltner has more clients to occupy him than most. Some of the world’s richest heirs and entrepreneurs have entrusted him and his team with almost CHF1 trillion ($1 trillion) of their money. That buys a lot of face time.

The 49-year-old has more than just his paymasters to satisfy. He has had the weight of the UBS Group’s prosperity on his shoulders since a 2012 restructuring put wealth management at the centre of its operations.

Still, clients are his favoured topic. He is even prepared to take some hits for them. Take the bank’s sponsorship of Formula One, which plays poorly with the general public in an age of austerity and cutbacks.

“I do not run the business to have good media coverage, nor do I run it to please analysts,” Mr Zeltner says, with little thought for the man sitting a few feet away tasked with getting his business good media coverage.

“We try to do the right thing for our clients. We have thousands of people who talk to clients, who have a pretty good feel for what they value, what they don’t value and we measure the success of these platforms.”

Pleasing analysts is not something Mr Zeltner has been accused of too much in recent months.

In February, the bank’s stock fell 8 per cent, largely because of unexpected outflows of client money in Mr Zeltner’s division. Earlier this month, UBS’s shares fell 6.5 per cent on the day the bank announced weaker than expected first-quarter profits, albeit with a rebound in client money flowing to wealth management.

UBS, and other wealth managers, have also taken a hammering in the court of public opinion after the Panama Papers’ revelations about banks helping the wealthy to use offshore havens to dodge taxes. Mr Zeltner does not want to discuss the Panama issues in any detail.

On the financial side, he believes his business should be judged on a longer-term basis. Important investors understand this, he says.

Still, the share-price collapses sting. “Do you really think it is my pleasure to see our share price drop on the back of this number?” he says of the market reaction to the bank’s fourth-quarter results. “Of course not. Of course you don’t have a good day. But then two, three days later you see everybody [in the market] struggling [and that] puts it into [perspective].”

Before those blips, UBS was almost universally lauded as the posterchild for bank restructuring thanks to its decision to cut back its investment bank and put wealth management at the heart of the group. “If you look at our valuation, we still earn a 30 per cent-plus premium over the basket [of European financials],” says Mr Zeltner. “Of course, it [the 2012 strategy] has worked.”

Mr Zeltner’s side of the business has grown invested assets from CHF821 billion at the end of 2012 to CHF925 billion at the end of March. Annual profits increased from CHF2.1 billion to CHF2.8 billion during the same period. A separately run wealth management Americas division has also blossomed.

Mr Zeltner is convinced UBS will retain an edge over its competitors, even as rivals including Deutsche Bank and Credit Suisse plough more resources into wealth management. “We are the only truly global wealth business,” he says. His mission statement is unchanged: “We want to be in the right markets and we want to show to the market that we can capture more share of that market than anybody else, and we have done that for 30 quarters.”

The world, however, has changed around him. Fears over China’s growth, low interest rates and market volatility are all making life more difficult. Mr Zeltner hopes a new round of cost cuts will revive his division’s profitability, which took a hit in the first quarter. He gave up on interest rate rises “two years ago” but believes Asia will remain an important growth area that will benefit UBS more than rivals investing there now.

“If you want to build Asia, you need a decade and you need substantial money, hundreds of millions,” he says. “Through the worst moments after the financial crisis, I invested every year in Asia. In just the past two months we opened new branches in Shanghai and Kowloon.”

Earlier this year, as the world fretted about China’s slowing growth, Sergio Ermotti, UBS group chief executive, outlined plans to double the bank’s headcount in the country over five years.

Mr Zeltner says the market and economic turmoil means his job is now even more exciting than it was back in 2012. He is the longest-serving member of UBS’s executive committee and an obvious contender to succeed Mr Ermotti.

Andrea Orcel, president of UBS’s investment bank, staked his claim for the top seat in an interview last year, when he said he would like to be chief executive of a bank in general and of his current bank in particular.

The comments raised eyebrows internally. Mr Zeltner treads carefully. “There is nothing to be discussed,” he says of the ambition to be chief executive that colleagues say he harbours. “I like my job a lot and I try in this job to contribute as much as I can to the success of UBS. I have a role to play and I love playing it.”

Despite describing himself as “very ambitious” he insists he is content to stay on in the job he has done for eight years. “I have learnt over the past couple of years that it is actually very helpful to have seen the cycles,” he says. “This notion that people should change jobs every other year is totally wrong.”

Copyright The Financial Times Limited 2016

Financial Times


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