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Sergio Ermotti Returns as UBS CEO to Lead Credit Suisse Acquisition

  • UBS Group AG brings back Sergio Ermotti as CEO to lead the Credit Suisse acquisition.
  • Sergio Ermotti’s return faces challenges such as workforce reductions, investment bank downsizing, and restoring investor confidence.
  • The new CEO’s appointment boosted UBS stock by 2.3%, taking over weeks after the Credit Suisse acquisition.

Sources have reported that Sergio Ermotti has been brought back as the CEO of UBS Group AG (UBSG.S) to lead its significant acquisition of Credit Suisse (CSGN.S). This unexpected decision aims to capitalize on his expertise in restructuring the bank after the worldwide financial crisis.

As CEO of UBS Group AG, Sergio Ermotti will face several pressing challenges, including implementing workforce reductions affecting thousands of employees and the downsizing of Credit Suisse’s investment bank. Additionally, he will need to restore confidence among high-net-worth individuals, ensuring that UBS remains the preferred destination for their investments.

From April 5th, the current chairman of Swiss Re (SRENH.S), Ermotti, will assume leadership. Previously, Ermotti served as the chief executive of UBS from 2011 to 2020. Following the announcement of his appointment, premarket activity on the Zurich stock exchange showed UBS shares indicated 2.3% higher.

Moreover, Ermotti will take over the reins just weeks after UBS acquired Swiss bank Credit Suisse, a sudden merger arranged by Swiss authorities to mitigate instability following Credit Suisse’s struggles.

Following the acquisition of Credit Suisse, UBS has become Switzerland’s sole global bank, backed by approximately 260 billion francs ($170 billion) in state loans and guarantees. This move increases the Swiss economy’s dependence on a single lender.

Andreas Venditti, an analyst at Vontobel, commented that Ermotti’s experience in reducing UBS’s investment bank after the financial crisis over a decade ago has prepared him well for this new role.

Meanwhile, UBS’s current CEO, Ralph Hamers, was absent from the announcement of the takeover, and he has agreed to step down to serve the interests of the new combination, the Swiss financial sector, and the country. The board decisions came in light of the new challenges and priorities facing UBS after the acquisition.

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