ZURICH (Reuters) - UBS's integration of former rival Credit Suisse's clients and data with its own platforms is "bang on target" after a successful test run, its tech chief told Reuters.

UBS CEO Sergio Ermotti has previously flagged that IT integration is one of the biggest risks facing UBS as it embarks on the second, trickier phase of merging with its fallen rival, after acquiring it in an emergency rescue deal last year.

Ermotti said in May that any delay to the IT integration would hit cost savings the Swiss banking giant has pledged to generate.

UBS last month completed a test that involved migrating hundreds of Credit Suisse clients from Hong Kong and Singapore, said Mike Dargan, UBS's Group Chief Operations and Technology Officer.

"We put a couple of hundred clients of different complexities from Hong Kong and Singapore through a test case in September," he said. "This went very well. The entire floor was applauding. There were tears."

The bank will begin migrating clients booked in Luxembourg and Hong Kong in the coming weeks, and Singapore slightly later, and other countries would follow later in 2024 and next year. UBS expects to migrate 1.3 million clients overall, he said.

"This is the largest migration of data as part of an M&A transaction in financial services, if not the biggest overall," Dargan told Reuters in an interview in Zurich. "Overall we are bang on target in terms of technology integration."

Investors have been pleased with how the biggest banking takeover since the global financial crisis is proceeding. UBS shares have gained nearly 56% in value since the takeover of Credit Suisse was announced in March 2023.

But the IT integration is fraught with risks given its complexity and the sheer size of the client base and data transfers.

For Credit Suisse, UBS is migrating 110 petabytes of data, with each petabyte equivalent to 500 billion pages of printed text, enough to fill 20 million large filing cabinets.

Credit Suisse had around 3,000 applications, 100,000 servers and 16 data centres.

So far UBS has decommissioned roughly 560 applications, 13 petabytes of data, and 40,000 servers, Dargan said.

"We are pretty much on target for applications and ahead on servers," he said.

Dargan, who is responsible for around 40,000 workers, said the bank would reduce the number of external contractors UBS uses in technology and operations, enabling it to keep the majority of Credit Suisse's permanent employees and lifting the proportion of tech and operations staff who are internal to 85% from a current 60%.

UBS employed around 110,000 people at mid-year.

Total headcount could fall to around 90,000 once the integration is complete in 2026, according to media reports.