Herbert J. Scheidt – From 13 to 75 years old

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He was told he was too unconventional for the bank, but he made it to the top anyway. Today, he is retiring after 40 years in the industry. What did he achieve?

Herbert J. Scheidt, a German citizen, is not your typical Swiss banker, but he has done more for the country’s financial center than many of his colleagues. And he did it without much fanfare, unlike countless other bank CEOs, some of whom gleefully rejoiced in their 15 minutes of fame after becoming “Banker of the Year” or something similar.

Yesterday he passed the baton of chairman of Vontobel to his designated successor Andreas Utermann at this year’s annual general meeting for the Swiss investment house. It’s the start of a new era – and the end of a very successful one. Scheidt has been there for exactly 20 years. He served as CEO until 2011 and Chairman thereafter. There are very few other bankers who can go back on this kind of balance sheet.

Bad Very bad

All this is remarkable in that Scheidt did not even want to become a banker, as he indicated in an interview with finenews.com Last year. He originally planned to be a development economist, even rising to the post of deputy director of the World Food Program in Rome.

But after the US government sharply cut funding for UN projects in the 1980s, he returned with his family to the Ruhr Valley. He was hired by Deutsche Bank where they told him, “You seem quite unconventional. But let’s see how it works.”

It was through Deutsche Bank that he then moved to Switzerland to lead the international private banking business in Geneva in 1996. Over time, it became increasingly clear that wealth management was simply considered by the dominant investment bank as just another distribution channel. . He looked for a new job and found one at Vontobel in the early 2000s. At the time, many Swiss bankers were probably wondering why he even went there.

Vontobel was doing badly, very badly.

Overturned the inkwell

The traditional financial institute had bitten more than it could chew from the new economy euphoria of the 1990s. It had its hands more than full of IPOs and related business activity. Scheidt looks back on that time saying, “The Vontobel name was actually better than what was inside.” A look at the course of action at the time would have sufficed. It was 13 Swiss francs.

When he first appeared before the council, he told them, “Our organizational structure is like someone knocking over the inkwell,” says one member who was present. Scheidt reviewed the organizational chart and created three clear areas with specific responsibilities (Private Banking, Investment Banking and Asset Management).

Uli Hoeness, Pierin Vincenz, Zeno Staub

He not only created a solid base for the bank, but a base that could withstand all the problems that Vontobel was unable to avoid, such as the untaxed German assets, for which the bank was later condemned. to a fine. It was also an embarrassing affair with the extremely corrupt honorary chairman of Bayern Munich football club Uli Hoess. Add to that the constantly fluctuating partnerships with the Raiffeisen cooperatives then led by Pierre Vincenz.

When Scheidt stepped down as CEO to Zeno Staub (photo above, right) in 2011, it was a shrewd decision. It unwittingly created the conditions for the bank to control the more or less permanent waves of consolidation in the market. Scheidt and Staub were constantly criticized for moving slowly, but Vontobel developed a strong instinct for redemption over the years, whether it was Commerzbank (Switzerland), private bank Notenstein La Roche or Finter Bank .

He even bought hugely successful holdings overseas, including Twenty Four Asset Management.

Taken by surprise

Scheidt’s soft tone but stubborn persistence paid off for Vontobel in many ways. He even became president of the Swiss Bankers Association succeeding Patrick Odierwhich surprised many Swiss bankers. They could not believe that a German was leading an association of national banks even though he had been a Swiss citizen for many years.

It shattered outdated structures of association, a bitter pill to some. He made enemies and his efforts resulted in the exit of the Raiffeisen banks from the association.

Scheidt wanted the Swiss bank to show pride in the outside world, which his domestically oriented colleagues also struggled with. But the bottom line is that he has done more for Swiss finance than anyone can see on the surface.

Vontobel, like Amazon and Apple

His biggest blow is the long-term vision he had of turning Vontobel into an investment house, which happened in 2019 when he boiled it all down to one point: “We have to react in a world that is changing so much, both socially and economically, due to digitization. Customers expect banking service that resembles what they get from Amazon or Apple. Clients no longer come because of bank secrecy but because they are looking for first-rate investment solutions. Investments mean the same to a bank as an engine means to Mercedes.”

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It also explains the slogan “investing is the new saving” that CEO Staub happily repeated around the country. Naturally, such far-reaching reorganizations cause collateral damage, and many long-serving employees have left the bank because of the changes. But none of this had any impact on Vontobel’s importance and reputation. Completely the opposite. The new president, Utermann (picture above), takes over an institute which has emerged strengthened from two long pandemic years.

Now an investment technology

What does Scheidt call today’s Vontobel? “We are by definition a bank as long as we hold clients’ assets. But because of our infrastructure, we are an investment tech.” The results of the last 20 years are very clear to him. The level of assets under management has more than quintupled to 244 billion Swiss francs in 2021 from 45 billion in 2002, with 58% of the total coming from international clients.

This has created an equity base that has more than doubled to more than CHF 2 billion over the past two decades. The number of employees has increased to more than 2,100 from 940 over the same period and now includes more than 50 nationalities.

And Vontobel’s stock price jumped from 13 to 75. Not bad considering he thought he ended up in completely the wrong place on his first day on the job.

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