The savvy Irish banker and UBS chairman Colm Kelleher recognized a dangerous power play could threaten him. Then, he acted quickly and purposefully, in line with his desire to leave a monumental legacy.

All eyes are now on Sergio Ermotti, the proverbial prodigal son returning to UBS as CEO to put it on the road to success in its new and mind-boggling dimension.

The man from the Canton of Ticino is undoubtedly a brilliant choice who embodies everything which the motley Credit Suisse top management team of recent years completely lacked. He knows the banking business from the ground up, brings international experience, has worked for several financial groups in various business areas, and exudes a Swiss earthiness and integrity that is now even more important.

Building a Monument to Himself

At the same time, Ermotti's appointment is above all a foolhardy coup d'état by the current UBS Chairman Colm Kelleher. It has long been speculated in Swiss financial circles, he is the one who is driving UBS. The steely Wall Street banker can, and indeed wants to, create an eternal monument for himself with UBS 2.0.

It is precisely under these circumstances the Irish citizen realized since the takeover announcement that his hopes could be dashed. There are several reasons for this.

A Thorn in the Side of Zurich's Establishment

First of all, the «monster UBS» born out of necessity, is far too big for the Swiss public's understanding. Second, the behemoth swallowing up Zurich's historical Alfred Escher bank represents an unpalatable colossus for the local economic and political establishment. Kelleher increasingly felt this, and soon realized that «his» Giga-UBS could mutate into damp squib in its infancy.

But Kelleher is smart enough to keep a cool head even in such a situation. So he threw his CEO Ralph Hamers, a man whom he previously described as the most capable man for the new UBS, overboard. 

On Monday a week ago, Kelleher called Sergio Ermotti, who was already lying in wait after the «NZZ» newspaper reported in a column that Ermotti was the CEO-in-waiting.

Workers' Bank Takes Over Zurich's Noble Bank

The rest is history. With Ermotti, Kelleher has killed several birds with one stone. First and foremost, Switzerland now has a local banking icon at the helm of the new UBS. At the same time, the Zurich establishment can boast that it has replaced the agile-minded Hamers with a bourgeois Swiss to steer the bank. UBS was founded in the historically working-class town of Winterthur and will swallow the «noble» Zurich-based Credit Suisse over the next few years.

Third, Ermotti already knows UBS from his own experience, and finally, he also brings sufficient investment banking experience crucial for the integration of Credit Suisse.

In the end, it would come as no surprise if one unit or another resulting from the takeover retained either the «Credit Suisse», or perhaps even the historical «SKA» appellation. The bet is on.