“This will be the most painful part”

class=”sc-3778e872-0 cKDKQr”>

In UBS, the first quarter of 2023 was not very bright in terms of accounting, although the bank announced the largest acquisition in its history in this period. However, the transaction was not reflected in quarterly results, except for the increased flow of client funds following the government-mandated bailout of Credit Suisse. After all, the high amount of new money is also a sign of confidence in the new megabank.

The quarterly result is solid with a good profit of CHF 900 million. Prior to the integration of CS, where many lawsuits are still pending, UBS apparently wants to at least have a clean scan of its own legal cases. The US has made provisions for an upcoming settlement in the junk mortgage case. Only the tax dispute with France is still unresolved.

“We are ready”

New and former UBS CEO Sergio Ermotti, 62, is delighted that he is now allowed to merge the two major banks: “I feel honored and privileged to be able to run the bank in these times,” he told the Ticino analyst conference. First quarter of UBS.

For Ermotti, it’s as if he’s taking on his own legacy: “When I left UBS, all options for the bank were open, including a major takeover.” Today the bank is stronger than ever. “We are ready for the integration of CS.” But this was also thanks to his successor and predecessor, Ralph Hamers (57).

The Credit Suisse acquisition is also the focus of several telephone conferences. Two things are of particular interest: the obstacles to be overcome before the deal can be concluded, and the fate of the employees.

“There is no reason to be afraid”

Ermotti sends reassuring messages to employees at both banks: “There is no reason to be afraid right now. We still have to manage two banks even after the deal is closed,” said Blick when asked. This requires everyone: “There is no urgent need for layoffs,” says Ermotti.

Still: it will be inevitable. Ermotti also acknowledges that duplication will be reduced: “This will be the most painful part of the whole process.” The UBS CEO hopes natural departures and demographics help: Many of the two banks’ employees are close to retirement.

“Facts instead of feelings”

To finally swallow CS, UBS still needs full approval from competition and supervisory authorities. Ermotti is confident that this can be done in the next few weeks. “That’s the mechanical part of the takeover that still needs to be processed,” he says. “I don’t expect any fundamental obstacles.”

Perhaps in response to the public debate over the regulation of the new mega-UBS, Ermotti says: “There are currently many voices in favor of a merger and not everyone is knowledgeable enough.” He, on the other hand, will base his decisions on “facts rather than feelings”.

Source :Blick