UBS Group AG has rehired veteran banker Sergio Ermotti to give the takeover of Credit Suisse into the hands of someone already experienced in rebuilding the bank after a crisis, Reuters writes.
The trader-turned-master of corporate wrongdoing now faces a tough task: laying off thousands of employees, shrinking Credit Suisse’s investment portfolio, and convincing the world’s rich and powerful that UBS’s vaults are a safe place to keep their money.
Ermotti will replace Ralph Hamers, and the chairman of the board of UBS has indicated that the reason for this decision is the need to give the job to the one who will do it best. Ermotti has been invited back because he will be in the best position to assess the biggest event in the world of finance since the international crisis that hit the world more than a decade ago.
Ermotti, who was CEO of UBS from 2011 to 2020, will take up the position from the 5th of April.
He told reporters that patience is needed now and the bank should be given a few months to develop a strategic plan. The 62-year-old banker returned to UBS, as he said, out of duty, and added that he had always wanted to be involved in a deal as big as the Credit Suisse takeover. He will take the helm just weeks after UBS took over its rival in a surprise deal. The takeover was facilitated by the Swiss authorities, which wanted to clean up the chaos caused by Credit Suisse’s problems.
The takeover has made UBS Switzerland’s only international bank backed by a government loan worth about 170 billion dollars. It’s a risky move that makes the Swiss economy dependent on one leading player.
Experts point out that Ermotti’s experience in the 2008 crisis makes him a suitable candidate for the task. Hamers, who took Ermotti’s place in 2020, has agreed to step down for the sake of successful bank mergers and national interests.
Read also: Credit Suisse’s bailout shakes up global financial market