Hong Kong/London
CNN
 — 

UBS is bringing back its former chief executive, Sergio Ermotti, effective April 5, to steer the group through its unplanned takeover of rival Credit Suisse

(CS).

UBS’ current CEO Ralph Hamers “has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country,” the bank said in a statement Wednesday. Hamers will remain at the lender for a transition period to hand over his duties.

“The board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition,” the bank added.

Ermotti was UBS CEO between 2011 and 2020 and is credited with successfully overhauling the bank following its bailout during the 2008 financial crisis. He is seen as a safe pair of hands as the group attempts to turn around embattled Credit Suisse.

During his tenure, Ermotti “transformed” UBS’s 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,” the lender said.

Similarly, according to earlier comments by UBS chairman Colm Kelleher, UBS plans to trim Credit Suisse’s investment bank “and align it with our conservative risk culture.”

Ermotti’s appointment is also a recognition of the challenge of combining two sprawling global banks with assets worth nearly $1.7 trillion. The deal also poses risks to Switzerland’s economy. The combined entity’s assets are twice the size of the country’s GDP, while local deposits in the new entity equal 45% of GDP — an enormous amount even for a nation with healthy public finances and low levels of debt.

In the Wednesday statement, Kelleher acknowleged that, while the acquisition would support UBS’s existing strategy, “it imposes new priorities on us.”

He added: “With his unique experience, I am very confident that Sergio [Ermotti] will deliver the successful integration that is so essential for both banks’ clients, employees and investors, and for Switzerland.”

Ermotti is currently chairman of Swiss Re and intends to step down after the insurer’s annual general meeting next month.

Hamers said he was “of course sorry to leave UBS,” but that “circumstances have changed in ways that none of us expected.”

UBS is holding a press conference on the new appointment, starting at 3:30 a.m. ET.

— This is a developing story and will be updated.