Newly appointed UBS CEO Sergio Ermotti (R) speaks with UBS Chairman Colm Kelleher during a press conference in Zurich on March 29, 2023.
Arnd Wiegmann | Afp | Getty Images
Shareholders gathering in Basel will be seeking reassurance that the board has a clear plan following the “shotgun wedding” between Switzerland’s two biggest banks, which remains mired in controversy, legal peril and public skepticism.
New CEO Sergio Ermotti will take the reins on Wednesday after his shock reappointment last week, as UBS takes on the mammoth task of integrating its fallen compatriot’s business.
Ermotti’s return was seen by many commentators as an attempt to restore calm, as the country’s long-established reputation for financial stability teeters on the line.
Concerns remain over the scale of the new entity and whether it creates too much concentrated risk for the Swiss and global economy, while reports have suggested that UBS’ plans may include job cuts of around 20-30% of the combined entity’s global workforce.
Credit Suisse held the final independent AGM in its 167-year history in Zurich on Tuesday, after Swiss authorities brokered an “emergency rescue” in late March, when the bank’s share price tumbled and depositors fled en masse.
The board was angrily confronted on Tuesday by shareholders demanding answers and accountability over the 3 billion Swiss franc ($3.3 billion) deal, which was rushed through over the course of a weekend and denied both UBS and Credit Suisse shareholders a vote.
Credit Suisse Chairman Axel Lehmann said he was “truly sorry” to shareholders, clients and employees, and suggested the bank’s turnaround plan after years of losses, scandals and compliance failures had been on track until turmoil in the U.S. banking sector sparked a flight of confidence.
The Swiss Federal Prosecutor is investigating the state-backed takeover for potential breaches of Swiss federal law by government officials, regulators and top executives.
Swiss regulator FINMA will hold a press conference at 7:30 a.m. London time on Wednesday.