UBS said on Wednesday that it was bring back Sergio P. Ermottiformer chief executive, as the Swiss banking giant prepares to take over its troubled rival Credit Suisse.
The unexpected return of Ermotti, 62, who plans to start on April 5, comes as UBS faces the tough job of absorbing Switzerland’s other banking titan after the government-negotiated takeover earlier this month. The deal was hastily arranged when Credit Suisse, plagued by decades of scandals, management changes and failed reform efforts, finally succumbed to investor doubts about its ability to survive a global wave of banking turbulence.
From 2011 to 2020, Ermotti led the revival of UBS during an earlier restructuring, after the bank collapsed during the 2008 financial crisis over bad mortgage bets and a 2011 trading scandal which cost the company $2.3 billion. His strategy refocused UBS on its historic strength of managing the wealth of global elites, and away from the riskier and more volatile trading and investment banking businesses.
Now, he is in charge of combining two longtime competitors, Switzerland’s biggest banks, in a process that is expected to involve the sensitive tasks of shutting down swaths of Credit Suisse’s investment banking operations and overseeing mass layoffs at overlapping divisions of banks.
UBS’s share price rose 2 percent in early trading.
UBS said its board made the decision to bring Ermotti back “in light of the new challenges and priorities facing UBS after the acquisition announcement.”
Colm Kelleher, UBS Chairman, said in a statement: “With his unique experience, I am very confident that Sergio will achieve the successful integration that is so essential for the banks’ clients, employees and investors and for Switzerland.”
Ralph Hamers, the current UBS chief executive, will stay on for an unspecified period as an adviser to help with the transition.
“Of course I regret leaving UBS, but circumstances have changed in ways none of us expected,” Hamers said in a statement. “I am stepping aside in the interests of the newly combined entity and its stakeholders, including Switzerland and its financial sector.”
