UBS said on Wednesday it is bringing back former CEO Sergio Ermotti to lead the Swiss bank. UBS is in the process of acquiring Credit Suisse facing financial crisis. Ermotti’s return to UBS is believed to be part of a government strategy.
Let us tell you that Ermotti was the top executive of USB for 9 years. Starting next Wednesday, Ermotti will replace current CEO Ralph Hamers.
The bank said in a statement that Hamers had been holding the position of CEO since November 2020. Hamers will remain at UBS during this transition period to ensure the successful acquisition and smooth handover of Credit Suisse.
UBS credited Ermotti with cutting its footprint and changing the bank’s culture, and pointed to his experience in bringing together large financial institutions.
A hastily arranged $3.25 billion deal for Credit Suisse was intended to stem the turmoil in the global financial system following the collapse of two US banks. Fearing long-running troubles at Credit Suisse, customers began pulling their money out of shares in Switzerland’s second-biggest bank.
When the central bank’s plan to borrow up to 50 billion francs ($54 billion) by Credit Suisse also failed to reassure investors and customers, Swiss officials urged UBS to acquire its smaller rival.
The Swiss executive branch passed emergency measures to bypass shareholders’ approval.
UBS Chairman Colm Kelleher said on Wednesday that he called Ermotti shortly after arranging the emergency deal on March 19, which involved Swiss regulators, the federal government and top executives from both banks.
Kelleher said on a conference call that it was the largest single financial transaction since 2008. This brings significant performance risk.
