UBS and Deutsche Bank: How Chairmen Make a Difference

Investors in two of the biggest European banks have different reasons to cheer a change at the top

Bloomberg Opinion — UBS Group AG and Deutsche Bank AG are both appointing chairmen who inherit settled strategies after years of restructuring and change.

But while UBS’s outgoing chairman made crucial decisions early to make the Swiss bank competitive again, Deutsche Bank’s chairman presided over years of indecision, intrigue and investor upset that only delayed any chance of a comeback for the German lender.

At both banks, the focus on what they should do and where they should do it is now well defined. UBS is looking towards growth in the U.S. and Deutsche Bank focused on fixing its businesses in Europe and then potentially adding more money-management business, which brings steady revenue. The new chairmen reflect these outlooks: Colm Kelleher, who spent a career at Morgan Stanley, comes to UBS, while Deutsche Bank brings in Alex Wynaendts, the Dutch former chief executive officer of insurer Aegon NV.

UBS’s outgoing chair, Axel Weber, is an astute and well-connected political operator who made had an immediate impact upon taking the job in 2012. He closed the bank’s large fixed-income trading business, cutting 10,000 jobs and refocusing on private banking, money management and equities trading.

It was a bold and costly move that took several years to complete but turned UBS into one of Europe’s highest-valued banks. Its business model today is most similar to Morgan Stanley’s, and it’s in the U.S. where UBS has become increasingly competitive in wealth management.

Kelleher’s experience and knowledge of U.S. wealth markets should help. The challenge he faces is to make the bank’s story seem exciting to investors again. UBS has a steady, sensible strategy that is all about making its services easier and more attractive to use with better digital access. It doesn’t need to do anything radical, but as a narrative to sell to investors, it’s a slow burn.

But while UBS shareholders will look back at Weber with fondness, Deutsche Bank’s are mostly relieved that Paul Achleitner is moving on. He is going because his term expires next year, but he might not have made it this far. Some of the bank’s biggest investors had had enough of Achleitner back in 2019 after years of capital increases, litigation, fines from regulators especially in the U.S., and a fundamental failure to find a strategy that would turn the bank around.


Achleitner let his first CEO, Anshu Jain, continue too long trying to make Deutsche Bank the last true universal bank in Europe. Jain wanted to compete with the biggest U.S. players in the parts of fixed-income trading with the highest capital needs and weakest returns for all but the very largest banks.

Achleitner replaced Jain with John Cryan, a well-respected former UBS banker, in 2015, but the two men quickly lost each other’s confidence. Cryan was focused on an expensive, but much needed overhaul of Deutsche Bank’s disparate computing, management and risk systems. The poor operating infrastructure had long contributed to the high costs and unruly culture that made it difficult to manage.

Achleitner, meanwhile, went looking for fresh funds and new investor support but landed on an acquisitive Chinese airline, HNA Group, which bought a large stake using derivatives contracts that seemed to undermine its commitment to the bank. Cryan was worried the instability this structure could cause to Deutsche Bank’s stock price even before Chinese government decided HNA had been too aggressive and pressured the group sell many of its investments.

All through this time, Deutsche Bank set a series of ever-more underwhelming targets for returns and, worse, continually failed to get anywhere near them.

The tide has only begun to slowly turn since 2019, when current CEO Christian Sewing made some more radical choices. He decided to get out of equities trading and turned its investment bank back into a business that primarily worked for companies rather than financial investors and traders.


It has finally found some stability, and once it can reliably generate capital from its own profits it will look to acquisitions to boost growth, which Deutsche Bank management says ought to be possible after next year. Any deals are likely to be in Europe and focused on boosting asset management and other fee-based wealth businesses, suitable areas for Wynaendts’s experience.

UBS’s stock price is much higher as a multiple of book value than Deutsche Bank precisely because it has performed this trick of increasing fee-based earnings in an ultra-low interest rate world much better than most rivals. Kelleher just has to keep it going and avoid any missteps. At Deutsche Bank, Wynaendts has a lot of work to oversee before he can get excited about going shopping for growth.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance. He previously worked for the Wall Street Journal and the Financial Times.