GENEVA (AP) — UBS said Wednesday that it's bringing back former CEO Sergio Ermotti to lead the Swiss bank as it moves forward with a government-orchestrated plan to take over struggling rival Credit Suisse.
Ermotti, who was the bank's top executive for nine years and led a turnaround following the 2008 global financial crisis, will take over next Wednesday from CEO Ralph Hamers.
Hamers took up the job in November 2020 and will remain at UBS during a transition period “to ensure a successful closure of the transaction and a smooth handover,” the bank said in a statement.
UBS credited Ermotti, who is now chairman of insurer Swiss Re, for having “cut its footprint” and changing the culture of the bank — and it pointed to his experience in bringing big financial institutions together.
The hastily arranged, $3.25 billion deal for Credit Suisse aimed to stem the upheaval in the global financial system after the collapse of two U.S. banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland’s second-largest bank to tank and customers to pull out their money.
Swiss authorities urged UBS to take over its smaller rival after the central bank’s plan for Credit Suisse to borrow up to 50 billion francs ($54 billion) failed to reassure investors and customers. The Swiss executive branch passed emergency measures to bypass shareholder approval.
UBS Chairman Colm Kelleher said Wednesday that he called Ermotti shortly after the emergency deal was arranged on March 19, which involved Swiss regulators, the federal government and top executives at both banks.
“This is is the biggest single financial transaction since 2008. That brings significant execution risk,” Kelleher said on a conference call.
Swiss lawmakers and academics have raised concerns that the deal could create an unwieldy Swiss banking behemoth, while UBS executives said regulatory issues loom internationally before the deal can close.
Many Credit Suisse customers have expressed regret at the looming disappearance of a 167-year-old bank that has been a pillar of Switzerland's renowned banking and financial industry.