Ermotti, a UBS veteran, may have secured the decade's most significant deal with the Credit Suisse rescue.

• In March 2023, UBS reached an agreement to purchase embattled rival Credit Suisse following a weekend of intense negotiations. However, not all parties were convinced of the wisdom of this decision.
• At the time, investors were "very concerned" about the complexity of the deal and whether UBS would make it work, according to Bruno Verstraete, founder of Lakefield Wealth Management.
• That sentiment is now changing, 18 months later.

In March 2023, Credit Suisse was acquired by Swiss banking giant after a weekend of intense negotiations.

Although Credit Suisse's investment banking business had been a persistent source of problems, investors were concerned about UBS's ability to revive it despite its attractive purchase price of $3.2 billion. Additionally, UBS's acquisition of Credit Suisse made it one of the largest banks in Europe, which raised political and regulatory concerns.

At the time, investors were "very concerned" about the complexity of the deal and whether UBS would make it work, according to Bruno Verstraete, founder of Lakefield Wealth Management, in an email to CNBC.

If a healthy person shares a sleeping space with someone who has a severe flu, they are likely to catch it too, according to him.

UBS appointed former CEO Sergio Ermotti to lead the bank through a complex acquisition.

Under the given market conditions, political dynamics, and time constraints, investors were acutely aware of the significant risks associated with acquiring unknown liabilities, as Verstraete pointed out.

Now, 18 months have passed, and the sentiment towards this deal has shifted, with many people agreeing that it is an exceptional opportunity.

Porta Advisors chairman Beat Wittmann stated in an email to CNBC that the merger with Credit Suisse is proceeding according to plan and timeline, and UBS CEO Sergio Ermotti's decision to move forward with ambition was correct.

The merger of UBS and Credit Suisse's parent companies was completed in May, followed by the transition to a single U.S. intermediate holding in June. In July, the Swiss entities of both companies were fully merged. The entire process is expected to be completed by 2026.

Verstraete stated that the integration process is being conducted in a Swiss manner, which is disciplined, pragmatic, and appears to be on track. He added that calm and trust have been restored.

UBS's second-quarter results in August alleviated concerns, prompting analysts to shift their focus to the company's business performance rather than the merger details.

UBS' announcement of faster progress on cost savings also pleased investors as the bank now expects to reach $7 billion in cost savings in 2024, exceeding its $13 billion target for the whole merger process by 2026. This is a significant improvement from the 2022 baseline.

'A lot of work ahead of us'

But Ermotti is not putting his feet up.

He reiterated something he had previously said about Credit Suisse's lack of sustainable profitability in August, following the results.

Ermotti stated that although we have made considerable progress as a group, the journey to restoring profitability to pre-acquisition levels will not be a straight line.

One of the big overhangs is potential new capital requirements from Swiss authorities.

Earlier this year, Swiss Finance Minister Karin Keller-Sutter stated in an interview with Tages-Anzeiger newspaper that it is "plausible" UBS may need an additional $15 to $25 billion in capital to address concerns about the bank's size and potential failure.

Clarity on these capital additions is expected to emerge in early 2025.

As such, some investors still need a little bit more convincing.

Porta Advisors' Wittmann stated that the share price is the crucial indicator to monitor UBS's financial performance, and the capital market exhibits a straightforward and straightforward "show me first" attitude.

In March 2023, UBS shares experienced a rally, but have since stabilized. Over the past 12 months, they have increased by more than 21%, but their year-to-date growth is only 1%.

Despite the uncertainty of the bank's future, others are rejoicing about the progress made thus far.

"Verstraete stated that this transaction could be remembered as one of the most successful deals ever made, and Mr. Ermotti may become a national hero, although the source of this acclaim is uncertain, whether it will come from Swiss citizens, employees, FINMA, or shareholders."