Credit Suisse takeover is no ‘deal of the century’ but leaves UBS stronger, says CEO
UBS Chief Executive Officer Sergio Ermotti dismissed critics' warning about the size of his bank's balance sheet on Wednesday, arguing that UBS's rescue of Credit Suisse had created a larger but also stronger lender.
This content was published on
3 minutes
Reuters
Ermotti returned to run UBS after the biggest bank merger since the global financial crisis was hastily arranged by Swiss authorities ten months ago to avert Credit Suisse’s collapse.
Integrating the two arch rivals is a huge, multi-year task that will mean thousands of job losses in Switzerland and elsewhere and a single financial institution with a balance sheet around double the size of the Swiss economy.
Speaking at the World Economic Forum (WEF) annual meeting in Davos on Wednesday, Ermotti said while he understood concerns, some in Switzerland were being “indoctrinated almost daily by a lot of academics” to focus on the bank balance sheet size.
“If you look at risk-weighted assets as a percentage of GDP or as a percentage of our balance sheet, you will discover that the new UBS is de facto very low risk, very focused business model,” he told CNBC in an interview.
Ermotti told a panel later on Wednesday that the acquisition of Credit Suisse, which has helped UBS shares soar more than 50% since, could be “the deal of the century” but only if the bank ensured integration went well.
“Are we larger? Yes. But are we stronger and more diversified? Yes…it’s not a present, it’s nothing for free,” he said.
UBS Chairman Colm Kelleher said on Wednesday UBS’ return on equity may be higher than its 15% target for end-2026, once the integration has been completed.
Kelleher also addressed concerns about the cultural fit of the two organisations.
“To a large extent a lot of bad actors had gone,” Kelleher said in an interview with Bloomberg in Davos. “The people we have brought in, on the whole it has worked quite well; we have been quite surprised.”
The moderator at Wednesday’s Davos panel asked if Ermotti felt UBS had been “forced” to buy its rival.
“We were asked,” Ermotti said, prompting laughter from the audience in the Swiss resort.
Switzerland’s largest bank will announce a three-year strategic plan in February alongside its fourth quarter results.
Shares in UBS dropped 1.2% on Wednesday, with bank shares across Europe falling in line with weakness across stock markets.
This news story has been written and carefully fact-checked by an external editorial team. At SWI swissinfo.ch we select the most relevant news for an international audience and use automatic translation tools such as DeepL to translate it into English. Providing you with automatically translated news gives us the time to write more in-depth articles. You can find them here.
If you want to know more about how we work, have a look here, and if you have feedback on this news story please write to english@swissinfo.ch.
External Content
Your subscription could not be saved. Please try again.
Almost finished… We need to confirm your email address. To complete the subscription process, please click the link in the email we just sent you.
University students in Switzerland join Gaza protest wave
This content was published on
Pro-Palestinian activists occupied university buildings in Lausanne, Geneva and Zurich on Tuesday, widening the protest movement in the Alpine nation.
TradeXBank to resume full operations after Sberbank Switzerland taken off sanctions list
This content was published on
TradeXBank, the former Swiss branch of Russia’s Sberbank, will be able to resume its dollar-denominated activities from the second half of this year.
Geneva decides not to remove controversial memorials
This content was published on
The city of Geneva has presented an action plan regarding a series of controversial local statues and monuments of historical figures linked to racism, colonialism or slavery.
University of Lausanne calls for end to pro-Palestine sit-in
This content was published on
The pro-Palestinian occupation continues at the University of Lausanne (UNIL). On Monday evening, a group of students refused to agree to the deadline set by the rectorate.
Ukraine peace conference should include Russia, says Chinese ambassador
This content was published on
China supports a peace conference on the Ukraine war that would see equal participation of all parties, says Chinese Ambassador to Russia Zhang Hanhui.
This content was published on
A majority of Swiss citizens have open attitudes towards various infertility treatments, including even egg donation, which is currently prohibited.
Reports of Swiss cyber fraud almost doubled in six months
This content was published on
The head of the new Federal Office for Cybersecurity (FOC), Florian Schütz, has presented a new strategy after just over four months in office.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.