Credit Suisse deal: UBS rehires Ermotti as CEO

Zurich: UBS Group has rehired Sergio Ermotti as CEO to steer its massive takeover of Neighbour Credit Suisse a surprise moves to take advantage of the Swiss banker's experience rebuilding the bank after the global financial crisis.

The trader turned corporate problem fixer faces the tough challenge of laying off thousands of staff, cutting back Credit Suisse's investment bank and reassuring the world's wealthy that UBS remains a safe harbor for their cash.

"We felt we had a better horse," said UBS chairman Colm Kelleher of the decision to replace current CEO Ralph Hamers after less than three years in charge. Kelleher said he brought back Ermotti because he was best equipped to see through the biggest deal in finance since the global banking crash more than a decade ago.

"This is not a Swiss solution," he said, seeking to play down any role of Ermita's nationality in getting the job, and instead emphasized his focus was on the large risks of making the merger work for UBS. "Being Swiss helps," Kelleher said. "But the majority of our business is global."

Ermotti, who was chief executive of UBS from 2011 to 2020 and is now chairman of Swiss Re, will take the helm from April 5. He made a plea for a little bit of patience over a couple of months to allow the bank to forge its strategic plan. "We cannot rush into decisions which are regrettable," he told journalists.

The 62-year-old said he returned to UBS after feeling what he termed a call of duty and added he had always wanted to be involved in a massive transaction like the takeover of Credit Suisse. He takes charge weeks after UBS bought its Swiss rival in a shotgun merger engineered by Swiss authorities to stem turmoil after Credit Suisse ran aground.

That deal made UBS Switzerland's one and only global bank, underpinned by roughly 260 billion francs ($170 billion) in state loans and guarantees, a risky bet that makes the Swiss economy more dependent on a single lender. UBS sha- res climbed 1.8% on Wednesday. Analysts said Ermita's experience paring back UBS's investment bank after the 2008 financial crash made him well equipped for the job. "The decision to bring back Sergio Ermotti is very positive as it reduces integration and execution risk by 80%," said Davide Serra, CEO of Algebras Investments.