Ermotti retired as UBS CEO in 2020 and is currently Chairman of the Board of Directors of reinsurer Swiss Re.
(Photo: Bloomberg)
Zurich Sergio Ermotti is returning as CEO to the major Swiss bank UBS. The longtime former CEO replaces Ralph Hamers at the helm of the largest Swiss bank, a week and a half after the state-managed takeover of local rival Credit Suisse.
The USB Board of Directors made this decision in view of the new challenges, the bank announced on Wednesday.
CEO Ralph Hamers will stay with the bank and advise Ermotti during a transition phase. “The Board of Directors would like to express its deep gratitude to Ralph Hamers for his outstanding leadership in leading UBS to record results for two consecutive years and for his instrumental role in bringing about the acquisition of Credit Suisse,” said the Board of Directors.
The changes will come into effect on April 5, after the bank’s general meeting.
UBS President thanks Hamers for resigning in light of “the current situation”
Ermotti retired as UBS CEO in 2020 and is currently Chairman of the Board of Directors of reinsurer Swiss Re. After a transitional period, Ermotti will step down as head of the reinsurer’s strategic and supervisory body. At Swiss Re, Jacques de Vaucleroy is to lead the succession plan as Vice President during the transition phase.
UBS President Colm Kelleher thanked Hamers “for his understanding of the current situation and his willingness to step down.” The acquisition of Credit Suisse will support UBS’s strategy, but it will also set new priorities. “I am very confident that Sergio, with his unique experience, will successfully complete the integration that is so important for customers, employees and investors of both banks and for Switzerland.”
UBS is taking over Credit Suisse for three billion Swiss francs in a bailout orchestrated by the Swiss government. The Swiss government and the National Bank are supporting the campaign with up to around CHF 260 billion in liquidity assistance and guarantees.
New CEO to reduce risk in investment banking
Ermotti had headed UBS for a total of nine years. Together with the Chairman of the Board of Directors, Axel Weber, he had shrunk the investment bank and expanded asset management. He thus played a large part in the current strength of UBS, which has now enabled the bank to take over its main competitor at a bargain price and to wring extensive concessions from the Swiss government in return.
His job with the integration of Credit Suisse looks similar: There, too, he has to reduce the risks in investment banking and bring the division into line with the strategy of UBS. The bank relies primarily on the advisory business for mergers and acquisitions. Under the new owner UBS, the bank is likely to withdraw from capital-intensive business areas, such as loan-financed takeovers, in which Credit Suisse has traditionally been strong.
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Before moving to UBS in 2011, Ermotti had a career at Unicredit. He had already gained experience with the integration of a major bank at his previous employer: in 2005 he moved to a management position at the Italian bank Unicredit, which had just taken over the Bayerische Hypo- und Vereinsbank (HVB).
With material from Bloomberg and Reuters.
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