Once upon a time, there were two powerhouse Swiss banks named UBS and Credit Suisse. These banks had been competitors for years, but one day in the year 2023, they decided to merge into a “consolidated banking group.”
The merger was not without controversy, as Credit Suisse had suffered from chronic loss-making and risk management failures under its previous leadership. However, new CEO Ulrich Koerner took charge in July 2022 and immediately launched a massive strategic overhaul aimed at reversing the bank’s fortunes.
Just when it seemed like things were turning around for Credit Suisse, crisis struck. A crisis of confidence among depositors and shareholders threatened to topple the 167-year-old institution. But then something unexpected happened – UBS stepped up with an emergency purchase of the stricken bank for 3 billion Swiss francs ($3.37 billion) over the course of a weekend in March.
Swiss authorities brokered the deal amidst controversy, leaving many wondering how this joint entity would operate moving forward.
UBS confirmed that it will initially manage both companies separately upon closure of the deal, with each institution continuing to operate its own subsidiaries and branches while UBS holds overall responsibility for the consolidated group’s executive board.
Koerner will join this executive board to ensure Credit Suisse’s operational continuity and client focus while supporting integration efforts between the two banks. Todd Tuckner will become chief financial officer for the entire group after Sarah Youngwood steps down post-merger.
The combined firm will run five business divisions, seven functions, four regions including credit suisse along special representatives reporting directly to Sergio Ermotti (CEO). Ermotti optimistically framed this move as solidifying “the Swiss model for finance around the world” anchored by “capital-light” strategies less reliant on taking risks or volatility; instead advocating disciplines with diversified revenue streams balancing all weather trends benefiting clients’ wide economic growth and stability.
Overall, this merger marks a pivotal moment for UBS, Credit Suisse, and the entire banking industry. Together they hope to strengthen the Swiss financial model around the world and promote a more stable and client-oriented future.
As in most fairy tales everything ended up well after cautious merging creating something that at least on paper appears stronger which is what we can wish for any economy or industry.