UBS’s Ermotti saved over $1 billion by cancelling Switzerland’s takeover aid

One of the biggest cost reductions pulled off by UBS Group AG Chief Executive Officer Sergio Ermotti last year was an early exit from the aid package that Swiss authorities had granted to sweeten the Credit Suisse takeover. Repaying the liquidity support and terminating the government’s loss-protection guarantee resulted in quarterly cost savings of about $550 million starting in the second quarter, UBS said in its earnings report on Tuesday. That adds up to more than $1 billion for the full year. Last August, UBS renounced a safety net it had negotiated as part of its government-engineered purchase of Credit Suisse five months earlier. UBS had assessed the acquired assets and concluded the package, which included 9 billion Swiss franc ($10.3 billion) in loss protection as well as liquidity support, was no longer needed. The move to cancel that aid also bought UBS more freedom in how it dealt with its defunct rival’s riskier assets, Bloomberg News reported at the time. Moreover, it ...