Sergio Ermotti returns after three years at the helm of the bank
The heavy task of handling the acquisition of Credit Suisse will be undertaken by Sergio Ermotti, who returns to the Swiss giant UBS. The two Swiss groups, from competitors, found themselves joining forces under adverse conditions, because the latter was on the brink of dissolution and after government intervention and provision of guarantees, UBS acquired it on favorable terms. UBS's surprise move comes as it seeks to tap into the Swiss banker's wealth of experience in rebuilding banks after the 2007-08 global financial crisis, according to Reuters.
< p>UBS chairman Colm Kelleher believes Ermotti is the best choice to manage the merger of the two banks.
The one-time stockbroker-turned-corporate-solver faces several serious issues, including laying off thousands of workers as a result of Credit Suisse's distress and takeover, cutting its investment banking arm, and appeasing of the world's wealthy that UBS remains a safe haven for their cash. “We felt we had a better choice,” UBS chairman Colm Kelleher said of the decision to replace current chief executive Ralf Hammers after less than three years at the helm. As Mr Kelleher explained, he brought Sergio Ermotti back because he is better equipped to handle the biggest financial deal since the global banking crash sixteen years ago.
“This is not a Swiss solution,” he said, seeking to downplay any role of Sergio Ermotti's ethnicity in getting the job. Instead, he focused on the big risks involved in making the merger happen for UBS. “Being Swiss helps,” said Colm Kelleher. “But for the most part our business is international in scope.” For the record it's worth noting that Sergio Ermotti, who will take over on April 5, served as chief executive at UBS from 2011 to 2020 and is now chairman of reinsurance company Swiss Re. He did not forget to appeal for “a little patience” for a few months to allow the bank to draw up its strategic plan. “We cannot rush into decisions that are regrettable,” he told reporters. He also added that he returned to UBS because he felt called to duty, but also because he had always wanted to be part of a huge transaction, such as the acquisition of Credit Suisse.
This deal made UBS the one and only. Switzerland's world bank, backed by about 260 billion francs ($170 billion) in government loans and guarantees. And that translates into a risky bet, making the Swiss economy more dependent on a single financial group, eliminating competition at that level of behemoth banks in the country.