Before the takeover: UBS sets the pace for Credit Suisse

Whoever pays, announces. This basic principle is reflected in UBS's future management structure. The major Swiss bank is taking over its downed rival Credit Suisse (CS). As soon as all the regulatory and competition authorities have been approved for this state-arranged emergency marriage, which is expected to be the case in a few weeks, a group management that has grown to 16 members will start the difficult work of integration. In doing so, the new and old UBS CEO Sergio Ermotti relies almost exclusively on the forces within his own company.

Johannes Ritter

Correspondent for politics and economics in Switzerland.

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Only one CS manager is to move to the top bridge of the new banking giant with the completion of the transaction, the so-called "closing": Ulrich Körner. This was announced by UBS on Tuesday. The 60-year-old German, who also has a Swiss passport, moved to the top of Credit Suisse in the summer of last year. He had tried in vain to get the bank, which was already lurching back on track after numerous scandals and horrendous losses.

There are several reasons why Ermotti is now bringing him to his side: Before joining Credit Suisse, Körner worked closely with Ermotti for more than ten years in various management positions at UBS. The two know each other and trust each other. Körner is to ensure that UBS's plans for the gradual integration of the CS Group are also quickly put into practice on the part of the acquired bank. "We need a direct link to our new entity," UBS Group sources said. There, Körner is seen as a kind of party soldier who is supposed to do everything he can to make integration a success. UBS estimates that this will take three to four years.

UBS replaces CFO

With the legal closing of the transaction, which is expected at the beginning of June, the holding company Credit Suisse Group AG will be transferred to the holding company UBS Group AG by way of a share swap for 3 billion Swiss francs and will disappear from the stock exchange. For the time being, however, UBS AG and Credit Suisse AG will operate side by side below UBS Holding, serving their respective clients and operating branches. Since CS is "independent" on paper during this transitional phase until gradual integration, the current executives will also remain in office for the time being, unless they leave on their own.

From now on, the individual CS board members will have to report to Körner as well as to the responsible managers who call the shots on the UBS bridge. This is unlikely to please CS executives such as Dixit Joshi, Francesca McDonagh and André Helfenstein, whom the Financial Times recently ranked among the hottest candidates for promotion to the UBS board. Coming from Deutsche Bank, Joshi became Chief Financial Officer of Credit Suisse last year.

Ermotti relies on old hands

In fact, UBS is now replacing its own chief financial officer, Sarah Youngwood. But she is replaced by a man from her own ranks: Todd Tuckner. The American (born in 1965) is a UBS veteran; he has been working for the bank since 2004, most recently as Chief Financial Officer of the important asset management division. Ermotti trusts in the experience of his old driver, while he apparently considers Youngwood to be too lightweight to accompany the now imminent, complicated merger work. The American-French dual citizen (born in 1974) had been hoisted into the finance chair by Ermotti's predecessor Ralph Hamers only a year ago. Tuckner had drawn the short straw in the selection process at the time.

Ermotti gathers even more old hands around him. He appoints Michelle Bereaux to the Executive Committee. The lawyer has been with UBS for more than 23 years. As Group Integration Officer, she will be in charge of the merger of the two banks. According to UBS, Bereaux, who most recently held a management position in asset management, has led various transformation projects in the group in the past.

UBS's head of human resources, Stefan Seiler, will also join the Executive Board. The Swiss, who has been working for UBS since 2011, is faced with the unpleasant and headline-grabbing task of cutting thousands of jobs in the wake of the merger. Beatriz Martin Jimenez also rises to the top. The Spaniard (born in 1973) is to take care of the handling of all those CS transactions that UBS does not want to continue. All other UBS Executive Board members, including Iqbal Khan (Asset Management) and Sabine Keller-Busse (Swiss business), will remain in their posts.

For the time being, CS is to maintain its existing management and risk control framework, writes UBS, stressing at the same time that "some new directives" will be introduced to ensure effective supervision.