UBS on Saturday nominated former Morgan Stanley President Colm Kelleher to become its next chairman — a move that could be solidified through a vote at the Swiss bank's annual shareholder meeting April 6.
The bank — the world's largest wealth manager — had been looking, by the end of the year, to propose a successor to its current chairman, Axel Weber, who is stepping down after a 10-year run. But Kelleher's name wasn't the first to be linked to the role. Reuters reported Friday that former UniCredit CEO Jean Pierre Mustier was on the shortlist to lead UBS's board of directors.
However, a source close to Mustier said the former CEO has no immediate plans to leave Pegasus Europe, the special-purpose acquisition company he set up in April.
As chair, Kelleher would work alongside UBS CEO Ralph Hamers to accelerate the bank's digital presence — a pivot that's expected to be a major talking point in a strategic update Hamers will lay out in February.
UBS said last month it would start a digital bank in the U.S. next year, targeting customers with between $250,000 and $2 million in assets and moving it into more direct competition with Bank of America's Merrill Lynch and Kelleher's former company, Morgan Stanley.
In UBS, Kelleher would join a bank that posted its highest quarterly profit in 11 years last month, according to Reuters, as trading by ultra-wealthy clients drove a 23% jump in fee income. However, UBS also faces a ruling next month by a French court in the bank's appeal of a €4.5 billion fine it was handed for allegedly helping customers evade taxes, and illegally soliciting clients at sporting events and parties. UBS has set aside $2 billion to cover expected legal costs, the Financial Times reported.
Weber lauded Kelleher in a statement Saturday as someone who "has a deep understanding of the global banking landscape."
"His more than 30 years of leadership experience in banking and excellent relationships around the world make Colm an ideal fit for UBS," Weber said, according to Bloomberg.
Kelleher left Morgan Stanley's No. 2 role in June 2019 but continued as a senior adviser for the bank, maintaining a hands-off approach.
"I've taken a year out specifically and I tell people, 'Please only call me if you really need me' because I want the new management team to do their own job," he told the Financial Times in July 2020. "I don't want to be like Banquo's ghost."
Kelleher joined Morgan Stanley's fixed-income sales unit in 1989. Serving as the bank's CFO during the 2007-08 financial crisis, he strategically slashed Morgan Stanley's balance sheet, cutting back on fixed-income trading positions and helping the company's investment bank regain clients' confidence after hedge funds pulled their money. He also converted Morgan Stanley to a traditional bank holding company to take advantage of Federal Reserve funding and negotiated a $9 billion investment in Japan's Mitsubishi UFJ Financial Group.
Kelleher has been a sought-after presence in the banking space. He had expressed disappointment at losing out on the opportunity to serve in Morgan Stanley's top spot but has turned down CEO job offers at Barclays and Lloyds, according to The Wall Street Journal. He told the Financial Times last year he intends to "stay active" well into his 80s through a combination of non-executive roles and pro bono work.
"Being able to help shape the bank's future is a great privilege, and I look forward to working together with the board, CEO Ralph Hamers and the whole team at UBS," Kelleher said in a statement Saturday.
UBS also said Saturday it would nominate Lukas Gaehwiler to become vice chairman of its board. Gaehwiler now serves as chairman of the bank’s Swiss arm.
The UBS moves come a day after Deutsche Bank said Friday it would nominate Alexander Wynaendts, the CEO of Dutch insurer Aegon, as its next chairman, succeeding Paul Achleitner.