UBS Brings Back Former C.E.O. to Face ‘New Challenges’ of Credit Suisse Takeover
UBS said on Wednesday that it was bringing back Sergio P. Ermotti, a former chief executive, as the Swiss banking giant prepares to take over Credit Suisse, its troubled rival.
The unexpected return of Mr. Ermotti, 62, who plans to start on April 5, comes as UBS faces the difficult work of absorbing Switzerland’s other banking titan after the government-brokered acquisition earlier this month. The deal was arranged hastily as Credit Suisse, tarred by decades of scandals, management upheavals and failed attempts at reform, finally succumbed to investors’ doubts about its ability to survive a global wave of turmoil in the banking sector.
From 2011 to 2020, Mr. Ermotti led a revival of UBS during a previous bout of restructuring, after the bank was laid low during the 2008 financial crisis by bad bets on mortgages and a 2011 trading scandal that cost the firm $2.3 billion. His strategy refocused UBS on its historical strength of managing the wealth of global elites, and away from the riskier, more volatile investment banking and trading businesses.
Now, he is charged with combining two longtime competitors, the biggest banks in Switzerland, in a process that is expected to involve the sensitive tasks of shutting down swaths of Credit Suisse’s investment banking operations and overseeing extensive layoffs in the banks’ overlapping divisions.
UBS’s share price rose about 2 percent.
The bank said its board made the decision to bring back Mr. Ermotti “in light of the new challenges and priorities facing UBS after the announcement of the acquisition.”
Colm Kelleher, UBS’s chairman, said in a statement: “With his unique experience, I am very confident that Sergio will deliver the successful integration that is so essential for both banks’ clients, employees and investors, and for Switzerland.”
At a news conference on Wednesday, Mr. Kelleher said he began talking with Mr. Ermotti about a potential return last Monday, the day after the Credit Suisse deal was announced. After leaving UBS, Mr. Ermotti became chairman of Swiss Re. He plans to step down from that role shortly after the reinsurance group’s annual shareholder meeting in mid-April.
To underscore the size of the challenge now confronting UBS, Mr. Kelleher — who was Morgan Stanley’s chief financial officer during the 2008 financial crisis — said that the Credit Suisse deal was bigger than any struck during that last period of turmoil, given the banks’ scale. UBS and Credit Suisse are two of the 30 banks designated by regulators as “globally systemically important,” which subjects them to stricter rules and oversight.
Ralph Hamers, UBS’s current chief executive, will remain for an unspecified period as an adviser to help with the transition.
“I am of course sorry to leave UBS, but circumstances have changed in ways that none of us expected,” Mr. Hamers said in a statement. “I am stepping aside in the interests of the new combined entity and its stakeholders, including Switzerland and its financial sector.”