- UBS said in a statement Wednesday that Sergio Ermotti will replace current CEO Ralph Hammers, who is set to remain at UBS to advise the bank during the transition period to ensure a smooth handover.
- UPS said in a statement that the move will take effect on April 5.
- Ermotti was CEO of UBS Group for nine years, from November 2011 to October 2020, and is currently Chairman of the Board of Directors of the insurance company Swiss Re.
UBS has appointed Sergio B. Ermotti as Group Chief Executive Officer following his approval of the acquisition of Credit Suisse.
Harold Cunningham | Getty Images News | Getty Images
UBS named Sergio Ermotti as the group’s new CEO on Wednesday, following the recent acquisition of Credit Suisse.
UPS said in a statement that the move will take effect on April 5.
Ermotti – who was Group CEO at UBS for nine years from November 2011 to October 2020 – will replace current CEO Ralph Hammers. Ermotti is currently the Chairman of the Board of Directors of the insurance company Swiss Re.
Hammers will remain at UBS to advise the bank during the transition period, the company said, “to ensure successful closing of the transaction and smooth delivery of the transaction.”
In a deal sealed by Swiss regulators, Switzerland’s largest bank UBS agreed on March 19 to buy rival Credit Suisse for 3 billion Swiss francs ($3.2 billion). The move came as governments look to stem an infection that threatens the global banking system.
The change of leadership came “in light of the new challenges and priorities facing UBS following the acquisition announcement,” UBS said Wednesday.
UBS reinstates Sergio Ermotti as CEO
The statement noted how Ermoti “successfully repositioned” the bank in the aftermath of the 2008 global financial crisis, and “achieved a profound change in culture within the bank”. The bank said this allowed the Swiss lender to “restore the confidence of customers and other stakeholders, while also restoring people’s pride in working for UPS”.
Hammers reportedly told staff of the government-orchestrated takeover that UBS “didn’t buy Credit Suisse just to shut it down”.
In the announcement, UBS Chairman Colm Kelleher described Hammers as an “outstanding executive” who has led UBS to “unprecedented success despite a challenging environment.”
He said that while the Credit Suisse acquisition supports UBS’ existing strategy, it imposes new priorities on the group.
“With his unique experience, I am absolutely confident that Sergio will bring about the successful integration that is so necessary for the banks’ clients, employees and investors, and for Switzerland,” said Kelleher.
The move surprised some market watchers, but one analyst said it was just part of the fallout from the merger deal.
As with “all forced mergers or acquisitions of unequal parties, you can always disagree and I think that’s what you’re seeing at play here,” Peter Garnery, head of equity strategy at Saxo Bank, told CNBC on Wednesday.
“It was very clear that the former CEO at UBS wasn’t really happy with that wedding and I think that’s the ramifications you’re seeing now.”
Notably, in an interview with Swiss newspaper NZZ am Sonntag in September, Ermotti argued that there was no “compelling” economic reason for Switzerland to have two large banks.
“I think everything we’ve seen since the global financial crisis with regulation leads us down one path, bigger and bigger banks, more and more concentration, which leads to fragility but also less competition, and I’m not sure that in the long term it’s going to be good for the financial system as a whole.”
“It puts the conversation out there: Are we heading toward more public intervention in money itself?”
He said the debates in the US after the collapse of Silicon Valley are “to what degree should there be guarantees on deposits above the FDIC’s deposit guarantee limit? If you do, what is the purpose of having banks, private funds and so forth?” “
“I think there are big questions here about this and where we are headed in the banking system,” Garnery said.
– CNBC’s Lim Hui Ji contributed to this report.
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