By Scott Kanowsky
Investing.com -- UBS Group AG (SIX:UBSG) has reappointed Sergio Ermotti as chief executive officer of the Swiss banking giant to help oversee its forced CHF 3 billion rescue of rival Credit Suisse.
Ermotti, who previously ran Switzerland's biggest lender for 9 years until stepping down in 2020, will replace current CEO Ralph Hamers from April 5. Hamers will stay on in an advisory role.
"The Board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition," UBS said in a statement on Wednesday.
The group added that Ermotti's experience guiding the business during the fallout from the 2007/08 financial crisis makes him an ideal candidate to lead the integration of Credit Suisse's operations. In particular, UBS argued, the 62-year-old built up the resilience of the bank by "putting its global wealth and asset management business [...] at its core."
"He swiftly transformed the investment bank by cutting its footprint and achieved a profound culture change within the bank which allowed it to regain the trust of clients and other stakeholders," UBS said.
As part of the transition into the role at UBS, Ermotti intends to step down from his current position as chairman of reinsurer Swiss Re AG (SIX:SRENH) after its annual general meeting next month.
Analysts at Morningstar said UBS' decision to bring back Ermotti is "surprising but makes sense." They added that the change does, however, highlight the disruption that the acquisition will bring to the bank's own strategy.
Folding in Credit Suisse is likely to prove highly complex, with reports suggesting that UBS may be facing thousands of jobs cuts and a fight to keep key staff members from defecting elsewhere. Speaking after the announcement, chairman Colm Kelleher said that the fusion of the two Zurich-based businesses is likely to be bigger than any deal executed during the financial crisis.
Shares in UBS gained as much as 3% in early European trading.