UBS has been forced to defend its new chief executive Ralph Hamers barely a month into his job, as a Dutch court surprised the bank over a probe into the 54-year-old’s personal role in a huge money-laundering scandal.
Axel Weber, UBS chairman, told staff on Wednesday that the bank had carried out an extensive review of Mr Hamers’ background when it recruited him, which included evaluating the potential investigation.
“We were fully satisfied with the results of these independent evaluations and the assessment of the Dutch prosecutor at the time,” he wrote in an internal memo.
ING paid €775m in penalties two years ago for compliance failures that allegedly allowed companies to launder hundreds of millions of euros and pay bribes over six years. The settlement ensured ING and its board were free from any criminal charges.
The penalties were the largest ever imposed on a company by the Dutch public prosecutor service, which said it found “clients were able to use accounts held with ING for criminal activities for many years, virtually undisturbed” from 2010 to 2016.
Mr Hamers, who led ING from 2013 to this year, lost his 2018 bonus because of the fine. ING’s chief financial officer, Koos Timmermans, resigned over the scandal.
But a group of investors have pursued the case and a Dutch court in The Hague questioned Mr Hamers over the summer to review whether it should be reopened.
The Hague Court of Appeal said it was “of the opinion that there are sufficient leads for a successful prosecution of this former director [Mr Hamers] as the de facto supervisor of the criminal offences committed by ING”.
It added: “The facts are serious, no settlement has been reached with the director himself, nor has he taken public responsibility for his actions.”
UBS hired Mr Hamers knowing that Dutch judges were reviewing matters relating to his time as chief executive of Amsterdam-based ING, but the decision to investigate him for his “personal” role in alleged wrongdoing still surprised some within the Swiss lender.
The ruling comes at a sensitive juncture for Switzerland’s banks, the largest of which have been desperate to draw a line under damaging legal disputes that have tarnished their reputations — and dented their balance sheets — in recent years, with limited success.
The country’s three biggest lenders, UBS, Credit Suisse and Julius Baer, have all undergone changes of senior leadership in the past 16 months, with new chief executives at each known more for their technocratic rather than charismatic qualities, and given implicit briefs to rein in legal risks.
Credit Suisse is still recovering from the scandal surrounding the ousting of its former chief executive Tidjane Thiam, who resigned amid a corporate espionage scandal this year. The bank is also still fighting publication of a 270-page report by regulators, and an ongoing criminal probe, concerning alleged money laundering by its former star banker Patrice Lescaudron. Mr Lescaudron killed himself in July.
Julius Baer, Switzerland’s third-largest bank, was punished by Swiss regulator Finma for a decade of “systemic lapses” in money-laundering checks in February. The bank last month set aside nearly $80m after reaching an agreement with the US Department of Justice in relation to the regulator’s investigation into corruption at Fifa, world football’s governing body.
“UBS has full confidence in Ralph Hamers’ ability to lead UBS,” the bank said in a statement on Wednesday. Mr Hamers declined to comment.
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