Swiss banking giant, UBS, has confirmed that Ulrich Koerner, CEO of Credit Suisse, will join its executive board after acquiring its domestic rival. The two banks will keep operating separately “for the foreseeable future” despite the high-profile merger expected to close within two weeks.

Driven by the concern that Credit Suisse may encounter financial difficulty following an unfortunate series of scandals, the Swiss government imposed this takeover for $3.25 billion. Joining the two Zurich-based banks, longtime rivals came by when Credit Suisse’s stock plunged, and jittery depositors quickly pulled out their money. The merger does put a stopper in the upheaval in the global financial system after the collapse of two U.S. banks that have shaken confidence in the sector.

“This is a pivotal moment for UBS, Credit Suisse and the entire banking industry,” said UBS CEO Sergio Ermotti, who was brought back to the bank to help see the deal through.

UBS Chairman Colm Kelleher said: “This acquisition is attractive for UBS shareholders, but let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. We have structured a transaction that will preserve the value left in the business while limiting our downside exposure. Acquiring Credit Suisse’s wealth, asset management, and Swiss universal banking capabilities will augment UBS’s strategy of growing its capital-light businesses. The transaction will benefit clients and create long-term sustainable value for our investors.”

Koerner will be the only executive from Credit Suisse to stay on board at UBS and will be responsible for managing the integration process and ensuring Credit Suisse’s operational continuity. Even though the merger is set to complete in the next few weeks, CEO Ermotti said it would take time to integrate the businesses and legal entities.

“Together, we will solidify and represent the Swiss model for finance around the world, one that is capital-light, less reliant on taking a risk, and anchored by stability and high-touch service,” clarified Ermotti.

Besides bringing Korner on board, UBS has announced several high-level appointments to ensure Credit Suisse’s operational continuity and client focus while supporting the integration process.

The team at UBS reinstates that “UBS AG and Credit Suisse AG will continue to operate independently for the foreseeable future, and UBS will carry out the integration in a phased approach.”

The Swiss attorney general’s office has opened a probe into events surrounding Credit Suisse ahead of the UBS takeover, and the executive branch ordered tens of millions in cuts to the bonuses of top Credit Suisse executives on Wednesday. The discussions regarding the merger were initiated jointly by the Swiss Federal Department of Finance, FINMA, and the Swiss National Bank, and the acquisition has their full support. 

The combined investment banking businesses account for approximately 25% of Group risk-weighted assets. UBS anticipates that the transaction will be EPS accretive by 2027, and the bank remains capitalized well above its target of 13%. Colm Kelleher will be Chairman and Ralph Hamers will be the Group CEO of the combined entity in time.