Iqbal Khan (left) and Rob Karofsky

UBS has completed the merger of the parent companies of the Swiss bank and long-time rival Credit Suisse, and announced an overhaul of the consolidated group’s executive board, with a sharpened focus on the key wealth management markets of the Americas and Asia-Pacific.

As of May 31, Credit Suisse has ceased to exist as a separate entity, having been deregistered from the Commercial Register of the Canton of Zurich. With the merger, UBS has assumed all the rights and obligations of Credit Suisse, including all its outstanding debt instruments. The share price of UBS rose 2.08% to close at US$31.88 in New York on Friday.

Commenting on the “significant milestone in our integration journey”, UBS group chief executive officer Sergio Ermotti says: “The merger of our parent banks is critical to facilitating the migration of clients onto UBS platforms. It will also unlock the next phase of cost, capital, funding and tax benefits from the second half of 2024.”

The transition to a single US intermediate holding company is planned for June 7, with the merger of the Swiss entities expected in the third quarter of 2024, subject to remaining regulatory approvals.

Executive board shake-up

Meanwhile, UBS announced a major revamp of its group executive board, with the wealth management division split into two roles.  “As we progress on pursuing our long-term ambitions, it is crucial that we increase our focus on sustainable, strategic growth, especially in the Americas and Asia-Pacific,” the bank says in a statement.

Iqbal Khan, president of the group’s global wealth management, will assume the role of president of UBS Asia-Pacific, effective September 1, and become co-president of global wealth management. He will relocate to Asia later this summer together with his family, the first time a divisional president will be based in the region, according to the bank.

Rob Karofsky will become president of UBS Americas and co-president of global wealth management, after leading the group’s investment banking division as co-president since 2018 and as president since 2021.

Khan and Karofsky will jointly manage global wealth management across all regions. In their new regional roles, the two “will further leverage the capabilities of the integrated firm across all business divisions”.

Industry watchers believe the shake-up of the wealth management division places the two top executives in contention to succeed Ermotti as group CEO once he steps down by early 2027.

Synergies and efficiencies

George Athanasopoulos and Marco Valla will join the executive board as co-presidents of the investment bank. The two have spent more than 30 years in investment banking.

Damian Vogel will be appointed group chief risk officer, succeeding Christian Bluhm, who agreed to delay his retirement last year to support the firm in the first phase of the integration. Bluhm has chosen to become a full-time photographer.

Stefan Seiler, head of group human resources and corporate services, will expand his responsibility to include group communications and branding led by Marsha Askins, who will be reporting to him.

Stepping down from the board are Ulrich Körner, CEO of Credit Suisse; Naureen Hassan, regional president of UBS Americas; and Edmund Koh, president of UBS Asia-Pacific.  Koh will remain regional chair of Asia-Pacific.

“The appointments to the group executive board … will allow us to continue to progress on our integration journey and realize the expected synergies and efficiencies, while putting even more emphasis on our long-term priorities and growth prospects, particularly in the Americas and Asia-Pacific,” Ermotti says.

The merger of UBS and Credit Suisse resulted from a shotgun marriage engineered by Swiss authorities “to secure financial stability and protect the Swiss economy in this exceptional situation". On March 19 2023, UBS agreed to acquire Credit Suisse for US$3.2 billion in stock and assume up to US$5.4 billion in losses.

Credit Suisse, already reeling from a series of financial scandals that began in early 2000s, was the biggest institution caught in last year’s banking turmoil triggered by the collapse of US regional lenders Silicon Valley Bank and Signature Bank, which were then taken over by US federal authorities.