Sergio P. Ermotti to step down as Swiss Re Chairman on 30 April 2023 after handover to Vice Chairman Jacques de Vaucleroy
Swiss Re announced that Sergio P. Ermotti will step down as Chairman of the Board of Directors on 30 April 2023, after completing the agreed handover period, to fully focus on his role at UBS. As previously announced, Jacques de Vaucleroy, Vice Chairman and Lead Independent Director, is leading the search for a successor and will chair the Board in the interim.
Sergio P. Ermotti, Chairman of Swiss Re, said: “It has been a great honour for me to chair Swiss Re over the past two years, and I wish to thank the Board of Directors, the Executive Committee and all employees for their commitment and support. Swiss Re’s strategic goals are clear, and I am convinced that the company is well positioned to thrive.”
Jacques de Vaucleroy, Vice Chairman and Lead Independent Director of Swiss Re, said: “On behalf of the Board of Directors, I would like to thank Sergio for his leadership in the past two years and wish him every success in his new role. The search for a successor has started. I appreciate the trust placed in me to lead the transition and very much look forward to working with the Board and management in driving Swiss Re’s strategy forward.”
UBS’s first-quarter 2023 results
1Q23 net profit of USD 1.0bn, with strong client inflows
Ad hoc announcement pursuant to Article 53 of the SIX Exchange Regulation Listing Rules
Solid underlying results and strong liquidity and capital amid uncertain market conditions
On a reported basis, and including an increase in provisions of USD 665m related to the US residential mortgage-backed securities (RMBS) litigation matter, 1Q23 PBT was USD 1,495m (-45% YoY). Net credit loss expenses were USD 38m, compared with net expenses of USD 18m in 1Q22. Total revenues decreased 7% YoY, while operating expenses increased 9%, driven by the aforementioned provision. The cost/income ratio was 82.5%. Net profit attributable to shareholders was USD 1,029m (-52% YoY), with diluted earnings per share of USD 0.32. The return on CET1 capital was 9.1%.
On an underlying basis, 1Q23 PBT was USD 2,354m, (-22% YoY). Underlying revenues decreased 8% YoY, while operating expenses decreased 2%, or 1% when excluding FX. The cost/income ratio was 72.8% and the return on CET1 capital was 16.5%.
In the quarter, we repurchased USD 1.3bn of shares under our share repurchase program. We have temporarily suspended share repurchases following the announcement of the anticipated acquisition of Credit Suisse, and we intend to resume them as soon as possible.
Our capital position remained strong. The quarter-end CET1 capital ratio was 13.9% and the CET1 leverage ratio was 4.40%, both in excess of our guidance of ~13% and >3.7%, respectively. We also maintained healthy liquidity buffers with an LCR of 162% and an NSFR of 118%.
Continued client momentum with inflows in all regions
In the first quarter, we maintained positive momentum across the firm and attracted USD 28bn of net new money in GWM, of which USD 7bn came in the last ten days of March, after the announcement of our acquisition of Credit Suisse. We also saw USD 20bn in net new fee-generating assets1 in GWM, USD 14bn of net new money in AM (of which USD 18bn in money market), and CHF 0.9bn of net new investment products for Personal Banking. Overall, we saw broadly stable loan balances2 as loan growth in Switzerland offset deleveraging in other regions. As clients repositioned their investments in response to interest rate increases, we captured demand for higher yield into money market funds and US-government securities.
We delivered these results during a quarter characterized by persistent concerns about interest rates and economic growth exacerbated by questions about the stability of the banking system, especially in the US. Against this backdrop, private and institutional investors’ activity remained muted.
In Americas, GWM attracted net new fee-generating assets1 of USD 4bn, with continued positive momentum in our SMA3 offering, which contributed USD 4.5bn of net new money in AM. In the quarter we also saw USD 8bn net new money in GWM, and continued momentum in advisor recruiting.
In Switzerland, we saw USD 8bn net new fee-generating assets,1 USD 2bn net new loans in GWM and P&C combined and USD 0.9bn net new investment products for Personal Banking (16% annualized growth).
In EMEA, we generated USD 3bn of net new fee-generating assets1 and net interest income rose by nearly 60% as we started to benefit from higher euro rates. We were also named best equities bank in EMEA4 and Europe financial bond house for the year.5
In APAC, we attracted USD 5bn of net new fee-generating assets1 contributing to a 17% net new fee-generating asset growth over the past 12 months, and we were recently named the best equity house in Asia and ANZ6 and best M&A bank in APAC by Global Finance.
Enhancing client franchises through the announced acquisition of Credit Suisse
We expect the combination with Credit Suisse to strengthen our position as a leading and truly global wealth manager, with around USD 5trn in invested assets. We also expect to reinforce our position as a leading universal bank in Switzerland, and to enhance our complementary investment banking and asset management capabilities, while adding strategic scale in the most attractive growth markets.
We intend to actively reduce the risk and resource consumption of Credit Suisse’s investment banking business. We plan for the combined Investment Bank (excluding assets and liabilities that we define as non-core) to account for around 25% of Group RWAs and to remain focused and strategically aligned to the products and capabilities that are most relevant to our wealth management clients.
While acknowledging the magnitude of, and complexity associated with, the integration and restructuring of Credit Suisse, we believe that this combination presents a unique opportunity to bring significant, long-term value to all of our stakeholders.
UBS named Sergio P. Ermotti as its new Group Chief Executive Officer, effective 5 April 2023
The Board made the decision to appoint Sergio P. Ermotti as Chief Executive Officer in light of UBS’s new priorities following its planned acquisition of Credit Suisse
Ad hoc announcement pursuant to Article 53 of the SIX Exchange Regulation Listing Rules
Ralph Hamers will remain at UBS and work alongside Sergio P. Ermotti as an advisor during a transition period to ensure a successful closure of the transaction and a smooth hand-over
The Board wishes to express its deep gratitude to Ralph Hamers for his outstanding leadership, steering UBS to record results in two successive years, and for his instrumental role in bringing about the Credit Suisse acquisition
Further to the announcement of 19 March 2023 regarding UBS’s acquisition of Credit Suisse, the Board of Directors of UBS have appointed Sergio P. Ermotti as Group Chief Executive Officer and President of the Group Executive Board, effective on 5 April 2023, after the Annual General Meeting. He will succeed Ralph Hamers, who has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country. Ralph Hamers will remain at UBS and work alongside Sergio P. Ermotti as an advisor during a transition period to ensure a successful closure of the transaction and a smooth hand-over.
The Board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition.
Sergio P. Ermotti was the Group Chief Executive Officer of UBS for 9 years and successfully repositioned UBS following the severe challenges arising from the Global Financial Crisis. In particular, he built financial strength and improved resilience by putting the firm’s leading global wealth and asset management business, and Swiss universal bank, at its core. He swiftly transformed the investment bank by cutting its footprint and achieved a profound culture change within the bank which allowed it to regain the trust of clients and other stakeholders, while restoring people’s pride in working for UBS. This unique experience, together with his deep understanding of the financial services industry in Switzerland and globally, make Sergio P. Ermotti ideally placed to pursue the integration of Credit Suisse. Sergio P. Ermotti is currently Chairman of Swiss Re. To facilitate an orderly transition at Swiss Re, Sergio P. Ermotti will stand for re-election at its AGM on 12 April 2023 and intends to step down after the AGM, following a short hand-over period.
Since assuming the role on 1 November 2020, Ralph Hamers, together with the Group Executive Board, has successfully managed UBS through a challenging market environment and has delivered record results in two successive years. He has encouraged a strong focus on clients and on shaping and executing our strategy, while ensuring tight cost management and strong risk discipline. He has driven the digital and sustainability agenda across the firm to make them important differentiators for our clients. The financial performance and capital strengths of the group have allowed him to achieve record returns for shareholders through dividends and share repurchases, which has benefited the share price. Finally, Ralph was instrumental in delivering the acquisition of Credit Suisse under extreme circumstances, to the benefit of both banks and the stability of the Swiss financial system.
UBS Chairman Colm Kelleher said: “Ralph has been an outstanding CEO of UBS, driving the group to unprecedented success despite a challenging environment. Under his leadership UBS built the strengths that have put us in a position to stabilize Credit Suisse and ensure a successful integration. On behalf of the whole Board, I would like to express my deep respect and gratitude for all that Ralph has achieved over the last two-and-a-half years and for his instrumental role in delivering the Credit Suisse deal, as well as his understanding of the current situation and willingness to step down. While the acquisition will support UBS’s existing strategy, it imposes new priorities on us. With his unique experience, I am very confident that Sergio will deliver the successful integration that is so essential for both banks’ clients, employees and investors, and for Switzerland. I know Sergio will hit the ground running.”
Ralph Hamers said: “Integrating Credit Suisse is UBS’s single most important task and I am confident that Sergio will successfully guide the bank through this next phase. I am of course sorry to leave UBS, but circumstances have changed in ways that none of us expected. I am stepping aside in the interests of the new combined entity and its stakeholders, including Switzerland and its financial sector – it has been a pleasure and privilege to lead this great bank to where it is today. I would like to thank Colm and the Board for their support and guidance, and I wish Sergio every success. I will support him during a transition period and I know he will lead UBS very effectively in the interests of all.”
Sergio P. Ermotti said: “I am honored to be asked to lead this bank at a time that is so important for all its stakeholders and for Switzerland. I would like to express my gratitude to Ralph for steering UBS so successfully. The task at hand is an urgent and challenging one. In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options. I am conscious of the uncertainty many feel and I promise that, together with my colleagues, our full attention will be on delivering the best possible outcome for our clients, our employees, our shareholders and the Swiss government.”