Sergio Ermotti, an old acquaintance of Unicredit, this morning added another medal in his palmarès as investment banker with a golden rock. In less than six months since Bern hastily recalled him at the helm of ubs, from which he resigned in 2020, the banker from Ticino has completed the merger with Crédit Suisse, a potentially indigestible morsel, indeed poisonous for the most critical, worried about the monopoly risk represented by a colossus which, with its 5 trillion assets under administration, dominates the size of the GDP of the Swiss Confederation.
Ubs-Crédit Suisse merger: the Swiss banker has convinced everyone
On the contrary, Ermotti has convinced everyone, politicians, public opinion and insiders that the integration of the prey a mega UBS "is the best solution for everyone, both for UBS and for the Swiss economy". This is also the opinion of the operators who this morning gave an abundant 5% rise to the shares of the main global safe of the assets of the super-rich, who in recent months, thanks to the skills of the Ermotti house (his brother is one of the most appreciated experts in Chinese art ), convinced Crédit Suisse's Asian clients that, despite the mishaps and Wall Street scandals of the absorbed institution, a Swiss bank remains the safest treasure chest in a turbulent world.
The Crédit Suisse brand disappears from 2025: cuts in the saved bank
And so, in record time, it ended up in a museum brand of Crédit Suisse, born in 1856, destined to disappear completely in 2025, once the transfer of all client files to the UBS system has been completed. It will not be a painless operation because it will involve the elimination of 3 thousand jobs. But it will be a relatively modest sacrifice for the new UBS which, at the end of June, had just under 120 employees, of which 45.286 coming from the former CS.
The gnomes of Zurich arrived at the final choice with extraordinary rapidity, especially if one thinks of the complexity of the internal and international scenario, given the nodes (and high-risk areas) linked to the activity of Csfb on Wall Street and to the City. A speed that authorizes us to think that, at an unsuspecting time, the gnomes of Bern had already developed an intervention plan for the seriously ill woman. One after the other, Ermotti explained, they have been discarded le alternative solutions, including the listing on the Stock Exchange of a part of the investment bank's assets or the demerger and subsequent sale of a part of the assets.
It was the outcome of the complex that made the decision for integration negotiated between Ermotti and the Comco, the Swiss Competition Commission. The banker managed to convince Berne that "competition on the domestic market remains very strong" because the large UBS, projected as it is into global finance, is only in third place on the domestic market. In return, Ermotti has already promised an energetic diet with the aim of save 10 billion francs (9,18 billion euros) by 2026 with the sale of assets no longer considered strategic.
Ubs, record profits of 29 billion against 3 billion expenditure
In the meantime, the bank is celebrating a Guinness Book of Records: at the end of the second quarter, the bank was able to enter a profit of 28,9 billion on dollars, equal to the book value of the assets acquired on 12 June against a disbursement of just over 3 billion euros. Net of these exceptional items, however, UBS had an excellent quarter with a profit of 1,1 billion dollars.
Completing the squaring of the circle for the Confederacy is the restitution to the state of the 9 billion francs already transferred to UBS to guarantee possible losses on Crédit Suisse's riskiest items, as well as the withdrawal of liquidity (100 billion francs) made available by the central bank to favor the mother of all bailouts. There was no need: on the contrary, the former Cs, before disappearing to the advantage of super Ubs, will repay the emergency loan that the central bank had granted before the intervention.
In short, mission accomplished. Bern buffered the image risk linked to the crisis of what was once the second largest banking force in the country. Who knows what the burned shareholders and bondholders think crisis. But Ermotti will be able to make up for it.
