Former UBS CEO rehired to supervise Credit Suisse acquisition.

UBS, a bank in Switzerland, has made a surprising announcement that Sergio Ermotti will be returning to manage the takeover of Credit Suisse, a competitor of UBS. This decision comes at a time when there are worldwide anxieties about the safety of the banking sector.

Ermotti was the CEO of UBS from 2011 to 2020 and was in charge of the bank's revival after the worldwide economic downturn. He will resume his position on April 5th with the primary responsibility of executing the intricate merger with Credit Suisse. Swiss financial regulators were compelled to enforce the merger to avoid a tumultuous failure.

On Sunday, UBS acquired Credit Suisse in a deal worth £2.65bn, which has severely damaged the banking industry's image in Switzerland. Prior to this event, Silicon Valley Bank also faced a collapse earlier this month. Investors and regulators worldwide have been closely monitoring the situation as there are fears that these financial issues could have a ripple effect across the entire global banking system.

The bank has chosen to go back to its previous CEO, which means that the current leader, Ralph Hamers, will step down from his position after only being in the role for less than three years. He will spend a brief amount of time working as an advisor alongside Ermotti.

In simplified language, the bank stated that due to the acquisition process, they have shifted their focus towards different tasks that can be better addressed by Ermotti. They referred to his expertise in reducing UBS's investment bank as an advantage in this new phase.

Hamers was an unexpected selection for CEO in 2020 due to his limited background in investment banking and wealth management. He explained that he is resigning for the benefit of the newly merged organization and its various stakeholders, including Switzerland and its financial industry.

According to a report by Reuters, Colm Kelleher, who is currently the chair of UBS, stated in a press conference on Wednesday that certain areas of Credit Suisse were plagued by an undesirable culture that UBS wished to avoid replicating. Kelleher emphasized that the primary objective was to restore stability to the organization.

During his discussion with Kelleher, Hamers stated that Ermotti's main goal is to decrease the magnitude of Credit Suisse's investment banking business, which is not a primary area of interest for UBS. Ermotti emphasized that the organization would take its time in making any crucial decisions.

In simplified terms, Kelleher thanked Ralph for his significant contributions in the past two and a half years, especially for his crucial involvement in finalizing the Credit Suisse deal. Additionally, he appreciates Ralph's comprehension of the current circumstances and his willingness to resign. The UBS's new undertaking requires additional focus and adjustments to their existing strategies.

After departing from UBS, Ermotti has been a member of the boards at Investindustrial, an Italian company involved in manufacturing, the Italian fashion organization, Ermenegildo Zegna, and Swiss development agency, Innosuisse. Although he continues to be the chair of the board for Swiss Re, he will relinquish his position following its yearly conference on 12 April.