UBS Recruits CEO to Oversee "New Challenges" Arising from the Credit Suisse Acquisition
UBS has re-hired its former CEO to handle the new obstacles that arise with the Credit Suisse acquisition.
Sergio Ermotti, who left UBS in 2020, is returning to the Swiss bank as it gets ready to take in its struggling competitor, Credit Suisse.
Blog Entry: March 29, 2023, 3:58 a.m. Eastern Time Zone
On Wednesday, UBS announced that they would be rehiring Sergio P. Ermotti, a former CEO, as the Swiss banking company gets ready to acquire Credit Suisse, their struggling competitor.
It was a surprise when Mr. Ermotti announced his come back, as he is 62 years old. He plans to start working for UBS on the 5th of April. UBS is facing a tough challenge of taking over another giant bank of Switzerland. The acquisition was rapidly arranged by the government, after Credit Suisse had many issues for years, such as problems with leadership, scandals and failed reform efforts. Investors were hesitant about Credit Suisse's ability to withstand the upheavals in the banking sector that have occurred around the world recently.
Between 2011 and 2020, UBS was significantly improved under the guidance of Mr. Ermotti, who implemented a restructuring plan. The bank faced difficulties during the 2008 financial crisis when it made poor decisions regarding mortgages, and suffered a loss of $2.3 billion as a result of a trading scandal in 2011. Mr. Ermotti's approach was to concentrate on UBS's traditional expertise of managing the wealth of prominent individuals, and to reduce its exposure to investment banking and trading activities that carried greater risk and unpredictability.
Currently, he has the responsibility to merge two well-established rivals; the most prominent financial institutions in Switzerland. This procedure will potentially require him to delicately manage the closure of significant parts of Credit Suisse's investment banking sectors and supervise vast staff reductions in areas where both banks share business functions.
In the beginning of the trading, the cost of UBS's shares experienced an increase of approximately 2 percent.
The board of UBS has announced that Mr. Ermotti will be reinstated due to the company's recent acquisition and the new hurdles that lie ahead.
The head of UBS, Colm Kelleher, expressed confidence in Sergio's ability to effectively unite both banks' customers, staff, and shareholders as well as Switzerland, given his exceptional background.
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The present CEO of UBS, Ralph Hamers, will continue to work as an advisor for an indeterminate amount of time to facilitate the changing process.
"I feel regretful to depart from UBS, however, the conditions have transformed unexpectedly," stated Mr. Hamers. "For the benefit of the newly united institution and its supporters, including Switzerland and its financial industry, I am choosing to step down."