UBS Taps Former CEO Ermotti to Replace Hamers
UBS Group AG is bringing back Sergio Ermotti as chief executive officer to oversee the historic acquisition of Credit Suisse Group AG, tapping a Swiss insider with extensive restructuring experience to replace Ralph Hamers after just over two years.
Ermotti, chairman of Swiss Re, will retake the role he held for nine years after the annual general meeting next week, the bank said on Wednesday.
Hamers will stay on at the bank for a transition period, having helped broker the $3.3 billion deal that saw UBS buy its local rival this month amid a collapse in confidence and client outflows.
Ermotti, 62, brings to the combined bank his familiarity with UBS and the Swiss financial landscape, qualities seen as critical for an integration that executives are stressing will be complicated and fraught with the potential for losses.
The Lugano-born executive previously steered UBS through the aftermath of a rogue trader crisis, slashed much of the fixed-income trading business, and downsized the investment bank on the way to its current focus on wealth management.
“This is a great deal if executed properly but it comes with risk,” UBS Chairman Colm Kelleher said at a press conference in Zurich. “The board decided in the round, balancing everything up, that for the next phase of this singularly most important and complicated transaction, Sergio would be the preferred executioner.”
UBS shares rose as much as 3% after the open in Zurich on Wednesday, trading up 2.4% as of 2:02 p.m.
Takeover & a Big Headache
The risks of taking on Credit Suisse’s legacy issues were underlined Wednesday with the separate claim by a US Senate panel that the bank is still helping rich Americans hide assets, nearly a decade after it pleaded guilty to tax-evasion conspiracy.
Related: Credit Suisse Still Aiding Tax Evasion by Ultra-Wealth: Senate Panel
Ermotti’s return restores a Swiss native to what is effectively now the nation’s megabank, amid a storm of political criticism and concern over competition and market-power in the domestic economy.
A majority of Swiss do not support the merger, with three quarters of respondents in a recent poll saying they believed it would weaken the Swiss financial center.
“We have to understand that there is an emotional reaction to what happened and this is part of the complexities that we will need to manage,” Ermotti said. “We will make our stakeholders comfortable that what we do is in the best interest of the taxpayers and the government and also all the employees.”
UBS had broken with tradition when it first appointed Dutch citizen Hamers as CEO and then Irishman Colm Kelleher as chairman, departing from the unofficial rule that at least one position should be occupied by a local executive.
The same held true at Credit Suisse, which was led in its final months by Swiss executive Axel Lehmann and dual citizen Ulrich Koerner.
