Zurich UBS boss Sergio Ermotti forms his management team for the time after the takeover of Credit Suisse. To this end, he has appointed five new managers to the UBS board. The biggest surprise: Ulrich Körner can continue as CEO of Credit Suisse, as UBS announced on Tuesday.
Körner, under whose leadership Credit Suisse had to be rescued by UBS in mid-March, is to initially continue to run the second-largest Swiss bank as an independent institution. He is the only top executive at Credit Suisse to make it onto the board of new owner UBS. There was initially no information about the future of the rest of Credit Suisse management.
Michelle Bereaux, previously Chief Operating Officer at UBS, will become Head of Integration. Beatriz Martin Jimenez, who is currently responsible for financing UBS in Treasury, is to run the bad bank and handle the risky securities held by Credit Suisse. In the future, Stefan Seiler will be responsible for human resources.
Ermotti has also named a new Chief Financial Officer, Todd Tuckner. He already held this role in the most important division of UBS, wealth management. The previous chief financial officer, Sarah Youngwood, will have to leave the company once the acquisition is complete.
This increases the UBS board to 16 posts. Among those remaining in office are Iqbal Khan as Head of Global Wealth Management at UBS, Rob Karofsky as Head of the Investment Bank and Sabine Keller-Busse as Head of Switzerland.
The big upheaval does not happen
According to its own statements, UBS assumes that the legal conclusion of the transaction will take place in the next few weeks. Initially, she wants to continue to operate the business of both institutes independently of each other. So the big upheaval is missing for the time being.
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The integration will take place in stages. For the time being, two separate parent companies are planned, UBS AG and Credit Suisse AG. Both would continue to operate their subsidiaries and offices, serving their clients and doing business with counterparties.
“UBS believes it has the right corporate structure and leadership team for a successful integration,” the bank said in a statement. “UBS will provide regular information about the integration process whenever possible.”
With the personnel decisions, Ermotti puts an end to speculation that other top managers at Credit Suisse have legitimate hopes of moving into the tightest management circles of the new major Swiss bank. The “Financial Times” recently reported that CFO Dixit Joschi, Chief Operating Officer Francesca McDonagh and Switzerland CEO André Helfenstein were shortlisted for Ermotti’s management team. Now it is clear: A board position does not jump out for this trio for the time being.
Signs of sale intensify
The fact that Ermotti will continue to run both banks as largely independent parent companies for the time being is also an indication that a spin-off of parts of Credit Suisse is becoming increasingly likely. So far, the UBS management had kept all options open:
- a complete integration of the former competitor
- a fork
- or an IPO of Credit Suisse’s profitable Swiss business.
UBS will most certainly list Credit Suisse’s Swiss business in the medium term, says a high-ranking banker. The political pressure is too great. However, he expects such a step at the earliest six months after the completion of the takeover.
According to industry estimates, the bank’s local business alone could be worth ten to twelve billion francs. UBS paid only 3.25 billion francs for the competitor in the course of the emergency rescue.
In recent weeks, more and more politicians in Switzerland have spoken out in favor of splitting off Credit Suisse. Among the supporters is, for example, FDP President Thierry Burkart, whose liberal party is considered to be particularly business-friendly. In addition, in a symbolic act, the Swiss parliament subsequently rejected the emergency takeover of Credit Suisse orchestrated by the government.
The background: In Switzerland, there is growing concern that UBS will have a dominant market position. In the future, the new megabank will account for around a third of the mortgage market and will be by far the largest domestic bank with deposits of over CHF 330 billion. The government had suspended an antitrust review in the course of the emergency merger.
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