Sergio Ermotti back as UBS chief for Credit Suisse takeover
Source: AFP
Sergio Ermotti will return as CEO of Swiss banking giant UBS to pilot the controversial acquisition of troubled rival Credit Suisse, its board announced Wednesday.
Ermotti spent nine years restoring UBS's reputation after its bailout by the Swiss government and the central bank during the 2008 global financial crisis, as well as the $2.3 billion in losses racked up by a rogue trader in 2011.
He is due to take over on April 5 from current boss Ralph Hamers, who has agreed to step down but will remain at his side during a transition period.
"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," Ermotti said in a statement from the board.
The marriage of UBS and Credit Suisse was hastily arranged by the government to prevent a global financial meltdown following fears of contagion from the collapse of three US regional banks.
The central bank has since admitted that the size of the resulting megabank could cause domestic problems in Switzerland.
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UBS was already the biggest bank in the country -- and will now become even larger after swallowing up the second-most important bank in the wealthy Alpine nation.
Switzerland, whose vibrant banking scene is a key part of the country's culture, has been shocked to the core by the enforced merger.
A recent poll showed a majority of Swiss people reject the deal and blame Credit Suisse's leadership for the outcome.
Swiss financial regulator FINMA is probing how to hold Credit Suisse bosses to account.
The Swiss parliament is planning a special session on Credit Suisse in April. It is also exploring whether to create an investigative committee to determine who was responsible for the debacle.
Checkered past
Credit Suisse was already embroiled in a series of scandals when its shares crashed on March 15 after the chairman of Saudi National Bank, its main shareholder, said his group would not up its stake in the Swiss lender.
A $54-billion lifeline from the central bank was not enough to stop the panic and the government brokered the weekend deal with UBS on March 19.
UBS and Credit Suisse were both among the 30 banks around the world deemed too big to fail and therefore considered Global Systemically Important Banks.
Credit Suisse was undergoing major restructuring before the takeover to repair trust after the implosion of the US fund Archegos in 2021, which cost the lender more than $5 billion.
That same year, its asset management branch was rocked by the bankruptcy of British financial firm Greensill, in which some $10 billion had been committed through four funds.
Source: AFP
