UBS Group AG has rehired Sergio Ermotti as CEO to steer its massive takeover of neighbour Credit Suisse - a surprise move that seeks to take advantage of his experience in rebuilding the bank after the global financial crisis.

The trader turned corporate problem fixer faces the tough challenge of laying off thousands of staff, cutting back Credit Suisse's investment bank and reassuring the world's wealthy that UBS remains a safe harbour for their cash.

Ermotti, the current chairman of Swiss Re, will take the helm from April 5. He was chief executive of UBS from 2011 to 2020.

He takes charge weeks after UBS bought rival Swiss bank Credit Suisse in a shotgun merger engineered by Swiss authorities to stem turmoil after Credit Suisse ran aground.

That deal made UBS Switzerland's one and only global bank, underpinned by roughly 260 billion francs ($170 billion) in state loans and guarantees, a risky bet that makes the Swiss economy more dependent on a single lender.

UBS shares climbed 2.2 per cent in early trade.

Analysts said Ermotti's experience paring back UBS's investment bank after the 2008 financial crash made him well equipped for the job.

"The decision to bring back Sergio Ermotti is very positive as it reduces integration and execution risk by 80 per cent,” said Davide Serra, CEO of Algebris Investments.

"Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. As a shareholder and bondholder I am very happy," he added.

Hamers hands overs reins

Ermotti said he was looking forward to integrating UBS and Credit Suisse.

"The task at hand is an urgent and challenging one," Ermotti said in a statement.

"In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options."

Current CEO Ralph Hamers, who succeeded Ermotti in November 2020, “has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country,” UBS said in a statement.

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

Hamers, who will stay on as an advisor, had no big-ticket M&A experience under his belt and faced the task of combining two banks with $1.6 trillion in assets, more than 120,000 staff and a complex balance sheet.

He was a notable absentee from the announcement of UBS's takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a "sad day" that nobody wanted.

A nearly 30-year veteran of Dutch lender ING, Hamers had been a surprise choice when he was appointed to lead UBS, as he had little experience in investment banking or wealth management.

At ING, Hamers was seen as a tech-savvy boss who spurned the image of a stuffy banker for a young, modern and approachable CEO, and there he was credited with overseeing a digital transformation.

The digital success at ING is what attracted UBS's then-chairman Axel Weber to poach him, at a time that some analysts said UBS's progress was stagnating.