Sergio Ermotti will return as CEO of UBS to lead the bank’s acquisition of troubled rival Credit Suisse. Ermotti spent nine years repairing UBS image after the Swiss government and central bank bailed it out in 2008. As well as the $2.3 billion in losses incurred by a rogue trader in 2011.
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. 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”. Ermotti said in a statement from the board.
Merging of UBS and Credit Suisse
The merger of UBS and Credit Suisse was hurriedly arranged to avoid a global financial meltdown. But the size of the resulting megabank could cause domestic problems in Switzerland. According to the Swiss central bank, which acknowledged last week.
UBS was already the country’s largest bank, and it will become even bigger after acquiring the second-largest bank in the wealthy Alpine nation. Where a vibrant banking scene is fundamental to Swiss culture.
UBS agreed earlier this month to acquire its local competitor in an emergency. Government-backed rescue after Credit Suisse lost the trust of investors, clients, and other banks following a series of scandals, losses, and client outflows. The merger of the two major banks promises to be complicated. But it also has the potential to grow UBS’s asset management business.
Ermotti was the CEO from 2011 to 2020. During his tenure, he overhauled governance policies in the aftermath of rogue trader Kweku Adoboli costing the bank billions of dollars. Even though the firm was also hit with legal penalties in France. Whereas it was found guilty of assisting wealthy French clients in concealing funds in undeclared Swiss accounts.
UBS emphasised Ermotti’s accomplishments in repositioning the bank following the 2008 financial crisis for the challenge ahead.