UBS renames Sergio Ermotti as CEO to lead Credit Suisse merger
UBS Group AG (NYSE: UBS) is in focus this morning after renaming Sergio Ermotti as its Chief Executive to oversee the pending acquisition of Credit Suisse (NYSE: CS).
Here’s what we know so far
Ermotti has previously led UBS between November 2011 and October 2020 – a nine-year tenure in which he played a central role in successfully repositioning the investment bank following the global financial crisis.
As per today’s announcement, Ermotti will replace Ralph Hamers (current CEO) on April 5th. On CNBC’s “Squawk Box Europe”, Peter Garnry of Saxo Bank said today:
With forced mergers of not equal parties, you can always have this friction. It was very clear that the now former CEO at UBS was not really happy about this shotgun wedding. I think that’s the fallout you see now.
UBS shares are trading nearly 5.0% up on Wednesday.
Garnry’s take on UBS-CS merger
Hamers will remain with UBS as an advisor through the takeover that Garnry is not entirely convinced will be a positive for the financial system in the long run.
It’s leading us down one path of bigger banks, more concentration, which leads to fragility, but also less competition. Question is, can you eliminate bad processes in CS and get entire entity back to around 10% ROE?
Also on Wednesday, the U.S. Senate Finance Committee said Credit Suisse helped Americans escape taxes for years. Its report today finds the embattled lender in violation of the terms of its plea agreement in 2014.
The bank stock is still in the green today.
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