UBS 'Savior' to Depart... CEO Sergio Ermotti to Step Down in 2027

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Search for Next CEO Underway... Four Candidates Mentioned
Capital Regulations Set for 2027 Remain a Key Challenge

Sergio Ermotti, former CEO of UBS. Photo by AP Yonhap News

Sergio Ermotti, CEO of UBS, Switzerland's largest investment bank, is set to step down in 2027. With Sergio's departure approaching after completing the integration with Credit Suisse (CS), competition for the next CEO is expected to intensify.

According to the Financial Times (FT) on January 12 (local time), Ermotti, who returned as CEO just before the acquisition of CS in 2023, has reportedly expressed his intention to resign in April 2027.

Ermotti previously led UBS for nine years from 2011 to 2020 before retiring. He returned as CEO in 2023 when UBS was preparing to acquire CS.

UBS acquired CS at the request of the government after CS faced a liquidity crisis triggered by instability in the financial markets following the collapse of Silicon Valley Bank in the United States. In response, the UBS chairman brought Ermotti back and asked him to oversee the integration process with CS for three to five years. Ermotti was also tasked with developing the growth strategy for the integrated group and searching for his successor.

Following Ermotti’s return, UBS successfully completed the integration with CS. During his tenure, UBS’s share price doubled. Recognized for his management capabilities, Ermotti became the highest-paid bank CEO in Europe as of 2024, earning $18.7 million (approximately 27.7 billion KRW).

With Ermotti expressing his intention to step down, competition for his successor is expected to heat up this year. The leading candidate is Aleksandar Ivanovic, Head of Asset Management at UBS. He joined the board in March 2024 and has been highly regarded by the management team for his successful leadership of the asset management division.

Other potential candidates include Iqbal Khan and Robert Karofsky, co-heads of the wealth management division, as well as Beatriz Martin, Chief Operating Officer (COO). Iqbal Khan, formerly of CS, joined UBS as Head of Asia-Pacific in 2024. Karofsky was appointed Head of the Americas during the same period. Martin was promoted to COO in October 2023.

The biggest challenge for the next CEO will be capital regulations. Swiss authorities have demanded that UBS secure up to $24 billion (approximately 35 trillion KRW) in additional capital. Since UBS expanded into a mega financial group with assets totaling 2,300 trillion KRW through the acquisition of CS, regulators believe it is necessary to address management risks associated with its overseas subsidiaries.

UBS has pushed back, stating that if it complies with the capital regulations, its core capital ratio could rise from the current 14% to as high as 20%, and has threatened to relocate its headquarters overseas. The capital regulations are scheduled to take effect from 2027.