Advertisement

UBS appoints Credit Suisse CEO Ulrich Korner to executive board

UBS tapped Credit Suisse CEO and former UBS chief operating officer Ulrich Korner on Tuesday to join the group executive board of the megabank created from the merger of the two banks. File photo by Hugo Philpott/UPI
UBS tapped Credit Suisse CEO and former UBS chief operating officer Ulrich Korner on Tuesday to join the group executive board of the megabank created from the merger of the two banks. File photo by Hugo Philpott/UPI | License Photo

May 9 (UPI) -- Swiss banking giant UBS sought Tuesday to consolidate its mega-merger with rival Credit Suisse by announcing the appointment of CEO Ulrich Korner to its Group Executive Board, pending closure of the $3.7 billion deal.

Korner, who has previously held senior executive positions at both banks, will use his knowledge of both organizations to help guide the integration process, focusing on Credit Suisse's operational continuity and client focus while the deal goes through.

Advertisement

The takeover is expected to be completed by the end of this month or in early June, the bank said.

Credit Suisse will continue to operate independently for the foreseeable future under Korner with UBS taking a phased approach to integrating the two banks, but UBS Group will initially manage the two separate parent companies.

Each will continue to run its own subsidiaries and branches, clients, and transact with counterparties, but the Credit Suisse Executive Board and division and function heads will report to both their respective UBS Executive Board member and Korner, UBS said.

"This is a pivotal moment for UBS, Credit Suisse and the entire banking industry. Together we will solidify and represent the Swiss model for finance around the world, one that is capital-light, less reliant on taking risk and anchored by stability and high-touch service," said UBS Group CEO Sergio Ermotti.

Advertisement

"With the new operating model and leadership team, UBS is well-equipped to build on its existing strength and the successes of the past decade. The integration of the businesses and legal entities will take time."

But Ermotti stressed that combining Credit Suisse with UBS's "highly capital-accretive business model," diversified revenue, disciplined risk management and all-weather balance sheet would benefit clients, employees, investors, the economies UBS serves and the wider financial system.

Apart from Korner and Ermotti, a former UBS CEO who was brought back in March to steady the ship 10 days after the emergency rescue deal was announced, most of the rest of the leadership team is unchanged with Iqbal Khan and Rob Karofsky staying on to head up UBS's all important global wealth management and investment banking divisions.

UBS agreed to take over rival Credit Suisse following a $69 billion run on the bank amid instability in the global banking sector in an emergency deal brokered by the Swiss government, the Swiss Financial Market Supervisory Authority and the central bank.

UBS expects the deal, which followed a $55 billion central bank loan to shore up Credit Suisse, mass "bail ins" that cost investors billions of dollars and UBS pay a fraction of its rival's book value, will see it emerge stronger as a "truly global" wealth manager, with around $5 trillion in invested assets.

Advertisement

UBS said its net profit fell by half in the first quarter to $1.04 billion, not because of the Credit Suisse deal, but due to $665 million in provisions to cover costs arising from a lawsuit related to U.S. mortgage-backed securities dating back to the 2008 financial crisis.

Latest Headlines