UBS Rehires Sergio Ermotti As Its CEO To Oversee Credit Suisse Merger

UBS Group AG has called back its former Chief Executive Officer Sergio Ermotti to lead the Swiss banking giant amid the new challenges and priorities it faces following its planned acquisition of troubled domestic rival Credit Suisse Group AG.

Following the news, UBS shares were gaining more than 2 percent in Swiss trading as well as in pre-market activity on the NYSE.

Ermotti has been appointed as the new Group Chief Executive Officer and President of the Group Executive Board, effective April 5, after the Annual General Meeting.

He succeeds Ralph Hamers, who was instrumental in bringing about the Credit Suisse acquisition. He will remain at UBS and work alongside Ermotti as an advisor during the transition period.

UBS had agreed to buy Credit Suisse last week after the latter lost much of its value in the wake of latest banking industry turmoil following the failure of U.S banks Silicon Valley Bank and Signature Bank, deemed as the biggest U.S. banking failures since the 2008 financial crisis.

Though Credit Suisse borrowed up to 50 billion Swiss Francs or around $53.7 billion from the Swiss National Bank as a decisive action taken to pre-emptively strengthen its liquidity, Swiss financial regulators later asked UBS for the deal as a move to restore necessary confidence in the stability of the Swiss economy and banking system.

In its latest statement, Hamers noted that integrating Credit Suisse is UBS’s single most important task now, and that he is stepping aside to serve the interests of the new combined entity, the Swiss financial sector and the country.

Since assuming the role on November 1, 2020, Hamers steered UBS successfully through a challenging market environment and delivered strong results in two successive years. He was instrumental in delivering the acquisition of Credit Suisse under extreme circumstances, to the benefit of both banks and the stability of the Swiss financial system.

The new CEO, Ermotti, was the Group Chief Executive Officer of UBS for 9 years from November 2011 to October 2020, and successfully repositioned the bank following the severe challenges arising from the global financial Crisis.

Ermotti is currently Chairman of reinsurer Swiss Re, which announced his planned resignation from the role after the Annual General Meeting on April 12 to fully concentrate on his CEO role at UBS. To facilitate an orderly transition at Swiss Re, Ermotti, who was elected Chairman in April 2021, will stand for re-election at its AGM and intends to step down after the AGM, following a short hand-over period.

Regarding his new appointment, Ermotti said, “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. I am conscious of the uncertainty many feel and I promise that, together with my colleagues, our full attention will be on delivering the best possible outcome…”

In Switzerland, UBS shares were trading at 18.08 francs, up 1.92 percent. In pre-market activity on the NYSE, the shares were gaining around 2.7 percent to trade at $19.78.

Credit Suisse was gaining around 2 percent in Swiss trading, and 1.1 percent in pre-market activity on the NYSE.

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