Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Exclusive-UBS weighs options for sale of Credit Suisse's Swiss unit - sources

Published 04/05/2023, 16:27
Updated 04/05/2023, 21:00
© Reuters. FILE PHOTO: UBS Group and Credit Suisse logos are seen in this illustration taken March 18, 2023. REUTERS/Dado Ruvic/Illustration
CSGN
-
CS
-
UBSG
-

By Emma-Victoria Farr and Oliver Hirt

FRANKFURT/ZURICH (Reuters) - UBS is reviewing options for Credit Suisse (SIX:CSGN)'s Swiss bank, including potentially keeping the unit's investment banking operations while selling the rest, two people familiar with the matter told Reuters.

UBS is studying plans to sell the Swiss banking business of Credit Suisse in an initial public offering (IPO) after taking over its smaller rival, the people said, speaking on condition of anonymity.

The considerations are at an early stage as UBS is focused on completing that takeover and it may not make a final decision on whether to pursue an IPO for months, another person said.

UBS and Credit Suisse declined to comment.

UBS is racing to complete the state-backed rescue takeover of Credit Suisse that will create a banking giant overseeing more than $5 trillion in total invested assets.

The future of Credit Suisse's business in Switzerland is being closely watched as one of UBS's key strategic decisions. A combination with UBS would create a dominant position in the Swiss loan market, according to analysts at Jefferies. The merger has drawn concern from lawmakers that it could lead to reduced competition.

Credit Suisse's Swiss bank is one of the lender's four operating units and is seen as the jewel in the crown. The unit reported pre-tax income of 1.5 billion Swiss francs ($1.7 billion) in 2022.

Stripping out its investment banking operations would reverse a move from just a few months ago. In January, Credit Suisse had moved the business from its broader investment banking division into the Swiss unit, according to Credit Suisse's 2022 annual report.

The two Zurich-based neighbours for decades have competed head-to-head for mergers and share sales across the world and UBS, which has lagged behind Credit Suisse in dealmaking and share sale rankings, looks to bolster its investment banking business.

UBS Chief Executive Sergio Ermotti said on Wednesday that his bank was working on closing its merger with Credit Suisse by the end of May or early June. On a possible sale, Ermotti has said all options for the Swiss business are on the table.

© Reuters. FILE PHOTO: UBS Group and Credit Suisse logos are seen in this illustration taken March 18, 2023. REUTERS/Dado Ruvic/Illustration

On Sunday, NZZ am Sonntag newspaper reported that UBS was working towards spinning off Credit Suisse's domestic unit. The Swiss newspaper cited a source as saying that UBS had come around to the idea of a spin-off, which it initially ruled out, because of growing public and political pressure.

($1 = 0.8848 Swiss francs)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.