UBS re-appoints CEO Ermotti for Credit Suisse takeover

Ermotti previously led UBS as CEO between 2011 and 2020. Keystone / Elia Bianchi

Former UBS chief executive Sergio Ermotti will return to the Swiss bank to lead the takeover of Credit Suisse and become CEO of the mega-bank.

Ermotti will replace current UBS CEO Ralph Hamers on April 5, UBS announced on Wednesday. Ermotti, who is currently chair of insurance group Swiss Re, previously served as UBS CEO from 2011 to 2020.

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On March 19, UBS agreed to acquire the embattled Credit Suisse for CHF3 billion ($3.25 billion) after a dramatic weekend of talks with regulators and government ministers.

The dramatic and unexpected turn of events has led to a re-shuffle at the top of UBS, with Ermotti being seen as the best person to take on the responsibility of steering the enlarged banking group.

“I am conscious of the uncertainty many feel,” Ermotti said in a statement. “We need to thoughtfully and systematically assess all options.”

“I am fully aware that we need to work very hard to avoid any [negative] consequences for taxpayers in Switzerland,” the Swiss national later told the media. To see the deal through, the Swiss government has promised billions in state funds to cover potential losses for UBS.

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“I cannot emphasise enough how big this deal is in terms of financial history and financial engineering,” said UBS chair Colm Kelleher. “For this massive integration exercise, the board felt Sergio would be the best pilot for this next voyage of UBS.”

Kelleher stressed that Swiss citizenship played only a peripheral role in deciding the next CEO of UBS. He also denied that Swiss ministers and regulators had a say in choosing Ermotti. The UBS board alone made the choice, Kelleher told journalists, and contacted Ermotti for the first time on March 20, the day after the takeover deal was agreed.

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Prescient remarks

Hamers, who had succeeded Ermotti in 2020, will remain at UBS as an advisor for the foreseeable future to help steer the takeover of cross-town rival Credit Suisse.

“Circumstances have changed in ways that none of us expected,” he said. “I am stepping aside in the interests of the new combined entity and its stakeholders, including Switzerland and its financial sector.”

In a prescient interview with the Neue Zürcher Zeitung newspaper in November, Ermotti said Switzerland does not need two large international banks to thrive.

“The strength of the country’s financial centre is its diversification, which is much more important than the number of big banks,” he said at the time.

Swiss Re, one of the world’s largest reinsurance groups, has appointed board member Jacques de Vaucleroy as interim chair until a permanent successor to Ermotti can be found.