UBS said it will bring back former CEO Sergio Ermotti to lead the Swiss banking giant following its $3.2 billion takeover of distressed rival Credit Suisse.
Ermotti, 62, whose reign will begin effective April 5, will replace outgoing CEO Ralph Hamers, who will remain with the bank in an advisory role to help with the transition period.
Ermotti, who was CEO of the bank from 2011 to 2020, is credited with helping UBS recover from the massive losses it incurred during the 2008 financial crisis.
UBS said that Hamers, who has been CEO since November 2020, “has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country.”
The bank said it made the move “in light of the new challenges and priorities” following its government-brokered emergency rescue of Credit Suisse.
Hamers, a Dutch national, said he regretted leaving UBS, “but circumstances have changed in ways that none of us expected.”
Hailing from the southern, mostly Italian-speaking Swiss region of Ticino, Ermoti acknowledged that “coming back to manage this situation is a challenge” but felt “a sense of call-of-duty aspect” to return.
“The task at hand is an urgent and challenging one,” Ermotti said in a statement.
The Swiss executive will assume control of a newly merged entity with some $1.7 trillion worth of assets under its management — which is around 30% of the entire Swiss banking sector.
Swiss authorities urged UBS to take over its smaller rival after the central bank’s plan for Credit Suisse to borrow up to $54 billion failed to reassure investors and customers.
The Swiss executive branch passed emergency measures to bypass shareholder approval.
Before the UBS acquisition of Credit Suisse, JPMorgan analysts wrote that “we see too much concentration risk and market share control.”
Swiss authorities engineered the merger in hopes of preventing a wider banking crisis.
Fears of contagion were stoked by the collapse of US-based lenders Silicon Valley Bank and Signature Bank of New York.
JPMorgan Chase and 10 of the largest lenders in the country banded together to provide a $30 billion infusion of capital to help troubled San Francisco-based First Republic Bank.
With Post wires
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