By Hanna Ziady, CNN
London (CNN) — 2024 will be the “pivotal” year in the takeover of Credit Suisse by UBS, with the migration of IT systems presenting huge risks as the two megabanks merge operations across more than 50 countries, UBS CEO Sergio Ermotti said Wednesday.
Ermotti said the migration of IT systems presents “the largest risk” to the merger, which is why in the vast majority of cases UBS will move Credit Suisse’s business onto its own platforms. UBS was keeping only about 10% of the smaller bank’s IT applications, he added. “In a sense, that will allow us to create clarity.”
Ermotti was brought back to helm UBS through its takeover of Credit Suisse within days of the government-orchestrated deal being announced in March. He is set to unveil a growth strategy for the expanded bank in February.
The deal — the biggest banking merger in history — has made UBS the world’s second-largest wealth manager overnight, behind only Morgan Stanley (MS), delivering, according to Ermotti, seven years’ worth of new client money.
But the merger is not without pitfalls. UBS is taking on a bank that Ermotti recently described as “structurally loss-making.” It also comes with a mountain of outstanding legal cases following years of scandals and compliance failures.
Ermotti said Wednesday that Credit Suisse’s keen focus on clients was both a strength and a weakness of the bank’s culture. “In some cases that over-focus on clients became a problem,” he said, noting that some decisions were taken to keep clients happy even when they were not in the best interests of the bank overall.
“The biggest opportunity (is) allowing the people, the clients, and the product and service capability that Credit Suisse brings to be able to flourish within UBS and make UBS stronger,” Ermotti said.
He noted that the combination had also boosted UBS’s investment bank in the United States, making it a more credible alternative to US banks. “I would say our capabilities are very close to the domestic players.”
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.