The decision to bring Sergio Ermotti back to the helm of UBS is the right one. The forced marriage of the two major Swiss banks UBS and Credit Suisse, which was negotiated within a few days, is not only highly complex, it is also politically highly explosive.
What this deal needs now is three things. Firstly, a leader who knows what is important when it comes to restructuring. Ermotti has proven in recent years that he knows this. He joined UBS in 2011 when the bank was on the ground after the turmoil and scandals of the financial crisis.
He turned the group upside down and thus laid the foundation for a very successful restructuring of the ailing financial institution – undoubtedly not without setbacks.
Secondly, in this situation, you need a manager who explicitly knows investment banking very well from his own experience. This is an important business area for Credit Suisse, but there will have to be tough cuts. Ermotti is a trained investment banker.
The decision to bring him back is not a vote of no confidence against Ralph Hamers, who took office only two and a half years ago, but against digitization as the first priority.
Hamers comes from retail banking and, as CEO of ING, has made digitization the linchpin of his strategy. His successes there have recommended him for UBS, but these skills are not in demand in the current situation.
And thirdly, in this situation, it probably needs a Swiss. The Swiss financial centre has run into difficulties as a result of this forced marriage. The discussions about what kind of Ascension Command has been launched there have only just begun.
With Ermotti, a Swiss leader returns who is well connected in the country, in banking, but also in politics. He will have to do a great deal of convincing to be able to sell this transaction as a success not only in the interests of the banks, but also in the interests of the Swiss financial centre.