UBS CEO Sergio Ermotti, after taking over Credit Suisse, insists that the bank will not be too big.
In June this year, UBS completed the emergency acquisition of Credit Suisse for more than 3 billion Swiss Francs (approximately 3.25 billion US dollars), forming a banking and wealth management giant with a balance sheet of 1.6 trillion US dollars, a figure that far exceeds the total economic output of Switzerland in 2022, which was 878 billion US dollars.
Ermotti stated that UBS's size is not considered too large, because size is not just about the relationship between the balance sheet and the Gross Domestic Product (GDP). He noted that 20% of the merged bank's balance sheet is relatively stable, mainly invested in the Swiss real estate market, and it has over 200 billion US dollars in capital to absorb potential losses.
Furthermore, Ermotti criticized the business model of Credit Suisse, attributing its years of losses and mistakes to a fundamentally unsuitable business model, which led to the bank's bankruptcy after losing billions of dollars over the past few years.
Credit Suisse's development strategy, characterized by rapid expansion and large-scale mergers and acquisitions, led to its internal control system's inability to adapt to new business and market conditions in a timely manner. Following the US subprime mortgage crisis, the bank performed poorly in multiple areas, entangling itself in a series of scandals and legal disputes. A series of losses and mistakes led Credit Suisse into difficulties, causing investors to withdraw their funds and triggering a liquidity crisis.
Ermotti is confident about successfully integrating Credit Suisse into UBS, noting that the majority of Credit Suisse employees possess good and honest qualities. He believes there will be no problems with the successful integration of Credit Suisse.
