UBS CEO
(Sergio Ermotti UBS CEO)

UBS rehires veteran banker Sergio Ermotti as CEO

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Swiss lender UBS is bringing back its former chief executive, Sergio Ermotti, to manage the hugely complex and risky task of completing the bank’s $3.25bn takeover of rival Credit Suisse, which would create the world’s fourth-largest bank, with 120,000 staff and $5tn of assets under management.

UBS agreed to take over Credit Suisse in a weekend rescue deal which was forced through by Swiss financial regulators in an attempt to prevent a chaotic collapse.

Ermotti, who ran UBS for nine years before handing the reins to Ralph Hamers in 2020, will take the helm from April 5. Outgoing CEO Hamers, who will stay on as an adviser, “has agreed to step down to serve the interests of the new combination … and the country,” UBS said.

UBS chairman Colm Kelleher said the board felt Ermotti was “the better horse” for such a massive integration. “There’s a huge amount of risk in integrating these businesses,” Kelleher said at a press conference.

Ermoti, 62, is credited with executing UBS’s turnaround after a series of scandals and losses nearly caused the bank’s implosion.

“Coming back to manage this situation is a challenge, but also . . . I felt a call of duty,” Ermotti told journalists. “I always felt that the next chapter [for UBS was] a transaction like this one. It would be a bit of a contradiction from me not to accept the job to execute on what I believe was the right next move for UBS.”

Credit Suisse rallied more than 4% while UBS Group surged 3.72% on Wednesday following the news of Ermotti’s return.

The merger is high-stakes for Switzerland’s economy as Swiss authorities and regulators’ hasty brokerage of the deal over the course of a weekend dealt a blow to the country’s reputation for financial stability. A report from Credit Suisse & CFA Society said Swiss investor sentiment sank by 29 points to -41.3 in March, the first monthly increase in pessimism since November 2022.

The banking turmoil has also created a febrile political environment in the rich Alpine country with the government looking to shore up the system ahead of the federal election in October.