UBS Brings Back Ermotti As CEO To Lead Credit Suisse Takeover

UBS announced on Wednesday it was bringing back former CEO Sergio Ermotti to lead the Swiss banking giant's controversial acquisition of troubled rival Credit Suisse

Zurich, (UrduPoint / Pakistan Point News - 29th Mar, 2023 ):UBS announced on Wednesday it was bringing back former CEO Sergio Ermotti to lead the Swiss banking giant's controversial acquisition of troubled rival Credit Suisse.

Ermotti spent nine years restoring UBS's reputation after its bailout by the Swiss government and the central bank during the 2008 global financial crisis, as well as the $2.3 billion in losses racked up by a rogue trader in 2011.

A UBS statement said he is due to take over on April 5 from current boss Ralph Hamers, who has agreed to step down but will remain at his side during a transition period.

"The task at hand is an urgent and challenging one," Ermotti, who is currently chairman of reinsurance giant Swiss Re, said in the statement.

"In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options," he said.

Ermotti, 62, was CEO at UBS from 2011 to 2020. UBS shares opened 2.5 percent higher following the announcement of his return.

The marriage of UBS and Credit Suisse was hastily arranged by the government to prevent a global financial meltdown following fears of contagion from the collapse of three US regional banks.

The central bank has since admitted that the size of the resulting megabank could cause domestic problems in Switzerland.

UBS was already the biggest bank in the country -- and will now become even larger after swallowing up the second-most important lender in the wealthy Alpine nation for three billion Swiss francs ($3.25 billion).

Switzerland, whose vibrant banking scene is a key part of the country's culture, has been shocked to the core by the enforced merger.

A recent poll showed a majority of Swiss people reject the deal and blame Credit Suisse's leadership for the outcome.

Swiss financial regulator FINMA is probing how to hold Credit Suisse bosses to account.

The Swiss parliament is planning a special session on Credit Suisse in April. It is also exploring whether to create an investigative committee to determine who was responsible for the debacle.

"I am conscious of the uncertainty many feel," Ermotti said.

"I promise that, together with my colleagues, our full attention will be on delivering the best possible outcome for our clients, our employees, our shareholders and the Swiss government," he said.

UBS said in a statement that its board decided to bring back Ermotti "in light of the new challenges and priorities facing UBS after the announcement of the acquisition".

The bank said Ermotti was "ideally placed" to pilot the integration of Credit Suisse after he "successfully repositioned UBS following the severe challenges" of the 2008 financial crisis.

UBS said that in his previous stint as CEO, Ermotti "achieved a profound culture change within the bank which allowed it to regain the trust of clients and other stakeholders while restoring people's pride in working for UBS".

Hamers said he was sorry to leave UBS but "circumstances have changed in ways that none of us expected".

"I am stepping aside in the interests of the new combined entity and its stakeholders, including Switzerland and its financial sector," Hamers added.