The newly appointed UBS CEO disputes that the bank has grown too large.

With the forced merger of rival Credit Suisse, Sergio Ermotti, the former and current president of Swiss bank UBS, has worked to alleviate concerns that the company may become overly large. The merger will result in a new Swiss bank with more than 120,000 employees.

In an external interview link with the Milan-based business journal Sole 24 Ore on Saturday, Ermotti claimed, "even if we join UBS and Credit Suisse, we won't be at the top of the international banking firms."

The Ticino native stated, "we're in a fantastic position thanks to our initiatives, and our increased critical mass at the global level will undoubtedly provide us a further edge." He claimed that the issue of "extreme" size never came up.

Combining two massive Swiss banks

The new UBS, which will come from the merger with Credit Suisse, will not have a higher proportion of the Swiss market than the cantonal banks and the Raiffeisen Group," stated Ermotti, who served as CEO of Switzerland's largest bank from 2011 to 2020.

He claimed that the only area where the other Swiss banks would fall short of the new UBS is lending to international corporations. But international banks will compete with us in this market.

Ermotti clarified that the new bank would replicate UBS's winning strategy. I believe the structure should be that of UBS today," he continued, emphasizing important elements, such as giving the wealth management business a central role and lowering investment banking and related risks.

Ermotti highlighted the risks involved with the deal while referring to the liquidity and guarantees of about CHF260 billion ($284 billion) provided by the Swiss government and the Swiss National Bank (SNB). He claimed that considering the acquisition's overall structure, you can conclude that the SNB and government's guarantees are sufficient.

Forced agreement

On March 19, UBS and Credit Suisse agreed to merge for CHF3 billion in a deal arranged by the Swiss government, central bank, and market watchdog to prevent the collapse of the nation's financial sector.

But, opponents of the forced merger are concerned about the size of the new bank, with more than 120,000 workers and $1.6 trillion in assets. In a time of upheaval, the forced merger also aimed to help maintain financial stability worldwide.

The public and lawmakers have also expressed concerns about the extent of state assistance in Switzerland.