Ermotti began his career as a teenage intern at the family-owned Corner Bank, a Swiss capital markets operation started from scratch, before working in the securities department and making his big break in 1987 at Merrill Lynch.
During the financial crash of 2008 it was UBS, not Credit Suisse, that took the bulk of the support from the state. UBS borrowed billions of dollars to help pay off problem loans, including subprime loans.
Ermotti, who played down his Swiss roots at the time, is credited with its recovery, pledging to return the bank to its former glory.
Ermotti struck a guarded tone on Wednesday with Kelleher, the chairman of UBS, and asked for “a little patience” over “a few months” to allow the bank to work out a plan.
One of Ermotti’s biggest challenges may be preventing Credit Suisse’s problems from contaminating UBS, which would involve hacking its investment bank and its cumbersome derivatives.
Analysts and investors are worried. KBW downgraded shares of UBS. Credit rating agency Moody’s adjusted its view on the outlook for some of the bank’s ratings to negative.
“Sergio will manage the investment bank, which lost more than 6 billion Swiss francs in 2021 and 2022,” outgoing UBS CEO Ralf Hammers told reporters, identifying Credit Suisse’s investment bank as one of the key risks from the deal. there was one.
However, sorting out Credit Suisse’s financial condition is only part of the problem.
“If you as a bank do something wrong, or you have people within the bank doing bad things, it costs you much more than any credit risk or market situation,” Ermotti told Bloomberg. was when he was still the CEO.
In a stark reminder of Credit Suisse’s troubles, the US Senate Finance Committee released a damning report on Wednesday, saying the bank continued to scam ultra-wealthy Americans even after reaching a plea agreement with the US government in 2014. had continued to help evade taxes.
“We don’t want to import a bad culture into UBS,” Kelleher said. “Clearly there are parts of Credit Suisse with bad culture. We need to put everybody through a culture filter.”