UBS backs chief as court triggers probe into his role in ING money-laundering scandal

UBS has backed its new chief executive, Ralph Hamers, after a Dutch court triggered an investigation into his personal role in a money-laundering scandal at his previous employer ING.

Mr Hamers replaced Sergio Ermotti as chief executive of UBS, Switzerland’s biggest bank, in November as part of a trend of European lenders picking less controversial leaders amid a spate of controversies in the sector.

UBS hired Mr Hamers knowing that the Dutch court was reviewing matters, but the decision to investigate Mr Hamers and not ING has taken some within the Swiss lender by surprise.

“UBS has full confidence in Ralph Hamers’ ability to lead UBS,” the group said in a statement on Wednesday. Mr Hamers declined to comment.

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.

In 2018 ING paid €775m in penalties for compliance failures that allowed companies to allegedly launder hundreds of millions of euros and pay bribes over six years.

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.

The settlement ensured ING and its board were free from any criminal charges.

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.

On Wednesday 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.”

Before leaving UBS, Mr Ermotti was unable to put to bed a potential €4.5bn fine the bank had tried to appeal for helping French clients evade tax.

Last week, UBS’s cross-town rival Credit Suisse announced it had chosen outgoing Lloyds Bank chief António Horta-Osório as its new chairman.

Lloyds is facing a review of whether issues relating to HBOS Reading were investigated and appropriately reported to authorities by Lloyds, following its acquisition of HBOS in January 2009. Criminal proceedings were later opened against six individuals in connection with a fraud at HBOS Reading.

Dame Linda Dobbs is due to present her findings of the investigation early next year.

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