UBS is considering options for Credit Suisse’s Swiss bank, including potentially preserving the unit’s investment banking activities while selling the remainder, said a report from Reuters quoting information from
According to people who spoke on the condition of anonymity, UBS is considering selling Credit Suisse’s Swiss banking sector in an initial public offering (IPO) after acquiring its smaller rival.
The discussions are in their early stages because UBS is focused on completing the takeover and may not make a final decision on whether to seek an IPO for months, according to another source.
There were no comments from UBS and Credit Suisse in this matter.
UBS is racing against the clock to complete the state-backed rescue buyout of Credit Suisse, which will create a banking behemoth with more than $5 trillion in total invested assets.
As one of UBS’s important strategic decisions, the future of Credit Suisse’s operations in Switzerland is being keenly scrutinised. According to Jefferies analysts, a merger with UBS would create a dominant position in the Swiss loan market. Legislators are concerned that the combination will result in less competition.
Credit Suisse’s Swiss bank is one of the lender’s four operating divisions and is regarded as the crown jewel. In 2022, the unit earned 1.5 billion Swiss francs ($1.7 billion) before taxes.
Dismantling its investment banking activities would be a reversal of a recent decision. According to Credit Suisse’s 2022 annual report, the company was transferred from its broader investment banking division to the Swiss branch in January.
For decades, the two Zurich-based neighbours have competed for mergers and share sales around the world, and UBS, which has lagged behind Credit Suisse in dealmaking and share sale rankings, is looking to strengthen its investment banking division.
Sergio Ermotti, CEO of UBS, stated on Wednesday that his company was trying to complete its merger with Credit Suisse by the end of May or early June. Ermotti has stated that all alternatives for the Swiss business are on the table in terms of a possible sale.
The NZZ am Sonntag newspaper reported on Sunday that UBS was attempting to spin off Credit Suisse’s domestic unit. According to a source, UBS has reconsidered the concept of a spin-off, which it had previously rejected, due to mounting public and political pressure.
(Adapted from Reuters.com)