Before collapsing, Credit Suisse wasn't helped by the awkward silence of then-CEO Ulrich Koerner. The constant stream of messages by Ermotti shows UBS is taking another path – in an entirely different context.

The World Economic Forum (WEF) starts in Davos today and the UBS leadership team will be there in force. Switzerland's largest bank will be represented by chairman Colm Kelleher, chief executive Sergio Ermotti, as well as the influential heads of key businesses, Iqbal Khan (global wealth management), Rob Karofsky (investment bank) and Suni Harford (fund business), as can be seen in the program.

In all likelihood, there will be a concentrated glut of messages from the very top. And given the enormous media presence in Davos, they will also be received and heard around the world.

Alpine Climax

It will also set another high point in a trend seen in recent months. UBS's leadership has been communicating like clockwork since last March when it first announced the rescue. Most of the time, Ermotti gets dispatched to participate in podium discussions, hold internal talks, and speak to the media,  or even, as he did recently, as an impromptu pair together with Swissmem President Martin Hirzel.

The message is always pretty much the same. Yes, the forced acquisition of Credit Suisse was a success. Of course, the employees of Switzerland's once second-largest bank have a fair chance of getting a job. And no, the new UBS is not too big and dangerous for the small country.

Talking Heads

However, he doesn't hold many speeches bearing the stamp of his strategy teams. The last was his presentation at the Swiss Risk Associationwhen Ermotti sketched out the bank's different rescue scenarios.

Overall, the current interpretation from communications professionals is that UBS and management have learned the lesson from Credit Suisse's collapse in March a year ago.

Misplaced Sentences

Back then, a general communications breakdown was seen as being responsible for bringing Credit Suisse down even though it was a thoughtless statement by majority shareholder Saudi National Bank that prompted a second, fatal run against the bank.

In particular, what was seen as particularly unhelpful was the long, awkward silence by then Credit Suisse chief executive Ulrich Koerner about the pursuit of the crisis-ridden bank's new strategy.

Radio Silence

Until that point, there had been complete radio silence from the day Koerner took up the job in August 2022. Management did not comment on any aspect of its strategy until the investor day and the related disclosures made on 27 October 2023. That prompted clients and markets to lose trust.

An Australian blogger claims that the bank faced imminent insolvency prompted a first bank run by Credit Suisse clients and it would have gone under then without the emergency liquidity provided by the Swiss National Bank (SNB), as the Finma chairman Marlene Amstad indicated afterward.

The Dick Fuld Effect

But Koerner stayed silent. Instead, the bank sent out chairman Axel Lehmann to make several questionable statements to try to calm the situation down. It only served to undermine the bank's reputation even more, putting it under even more pressure with Finma and markets.

In hindsight, Koerner's silence raises clear questions. An explanation by those very close to the bank mentions that the communications area feared a so-called «Dick Fuld» effect. In other words, they were thinking about the height of the financial crisis when Richard S. Fuld Jr. presided as the last head of the US investment bank Lehman Brothers whose subsequent collapse in 2008 almost brought the entire global banking system down.

Fearing Panic

Fuld did not want to acknowledge the difficulties the bank faced and withheld information. But when he had no choice but to go public in September 2008, the market took that as a clear signal, and panic spread.

That is why, according to these sources, no one wanted to send out Koerner as they thought that the step could be interpreted as an alarm signal.

Tight Planning

UBS finds itself in a completely different situation and it has come to a very different conclusion. It has already achieved many waypoints in its takeover of Credit Suisse and quickly at that. Integration is a top management responsibility and Ermotti has been talking about progress at regular intervals. That will probably continue in the next few months.

The current time plan foresees Credit Suisse completely disappearing by 2026 while the merger of the UBS Switzerland and Credit Suisse Switzerland entities is expected this year. According to certain sources, the next steps have been minutely planned out until at least the middle of the year.

Extreme Detail

There are a few nuances to the current disclosure strategy, something that may become visible between the lines at the WEF. The extremely detailed steps integrating divisions, areas, and teams have started, thus management members such as Khan and Karofsky will be given more weight in communicating to the outside world.

In possible relation to that, Khan was interviewed by the Swiss weekend newspaper «NZZ am Sonntag» (paywall, German only). From a more generalized marketing point of view, he was in an optimal position to broadcast a message that stood more or less behind the statements made by his CEO.

Silence is Risky

On the other hand, UBS Switzerland CEO Sabine Keller-Busse is not represented at the WEF. Presumably more will be heard about it, particularly when Credit Suisse Switzerland starts to lay off employees. Her announcements are likely to elicit more pain. Still, not talking about it, as UBS now knows after the Credit Suisse debacle, is far riskier.