Earlier this month, UBS UBS +4.36% brought back its former CEO to take the reins once again as the bank absorbed collapsed rival Credit Suisse CSGN +4.03% as the Swiss bank experienced its deepest turmoil for a month. This boosted the share price, helping banks more broadly to settle after a month of turmoil.
It has been announced on Wednesday that Sergio Ermotti, the former Chief Executive of UBS from 2011 to 2020, will succeed Ralph Hamers as CEO from April 5. UBS shares (ticker: UBSG.Swiss) rose almost 4% in Zurich today after Ermotti developed UBS’ wealth management unit and reduced risk exposure following losses sustained in the financial crisis.
In the aftermath of Silicon Valley Bank's collapse earlier this month, Credit Suisse was one of the biggest sufferers of the market jitters. On Tuesday, the SPDR S&P Regional Banking ETF (KRE) gained 1.4% on the strength of the First Citizens acquisition of much of SVB, which helped push up the index.
Another lender that has been under fire lately is First Republic Bank (FRC) PACW +2.72% (PACW), which gained 7% in early trading on Thursday. PacWest Bank (PACW) rose by 1% and Western Alliance (WAL) moved up by 4.3%.
The EUR STOXX Banks Index (SX7E) was up 2% on Wednesday, and Ermotti's return to UBS was seen as a positive step towards credit Suisse's integration into UBS. As one of Switzerland's most successful executives over the past decade, Ermotti is considered one of the most successful Swiss executives of the last few decades.
He said he "told himself up to leave the bank in the interest of both the bank and its stakeholders" and thanked UBS for the opportunity to work with him. Hamers will remain on the board of directors during a transition period. He is Dutch by origin and has served as chairman since 2020.
Several analysts at RBC Capital Markets, including Anke Reingen, revised their ratings on UBS shares from Outperform to Sector Perform on Wednesday. The analysts reasoned that the stock is less attractive due to the ongoing tough market conditions, compared to the long-term upside that the Credit Suisse deal could provide.
Furthermore, a report published Wednesday by the U.S. Senate Banking Committee contends that Credit Suisse, along with other international banks, has abetted the tax evasion of wealthy Americans.
A statement from Credit Suisse stated that the bank would not tolerate any form of tax evasion. The report describes a number of legacy issues, some that date back a decade or more, some of which we have addressed in the past to root out individuals who seek to conceal revenue from tax authorities through their assets.
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