SIX CEO: CS takeover by UBS will put pressure on our earnings
Published: Wednesday, Mar 13th 2024, 10:20
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Following the takeover of Credit Suisse by UBS, stock exchange operator SIX must fear losing a good portion of its revenue. "These are our two biggest clients that are merging," said SIX CEO Jos Dijsselhof in an interview with the news agency AWP. "For our business, this naturally means that our earnings will come under pressure."
For example, both UBS and Credit Suisse would obtain data from SIX. "As soon as the systems are integrated, we will probably lose a contract," said Dijsselhof. On the other hand, this will not happen overnight, but will take a few years. At the same time, SIX is in close contact with UBS in order to generate new business if necessary. For example, by the infrastructure provider helping the big bank with the integration.
At SIX, the customers are also the shareholders. In terms of shareholders and influence on the business, however, the merger of the two major Swiss banks is unlikely to change much, according to the CEO. "UBS has always been the largest client and will remain so." And: "We will always listen to our largest client, but of course we will also focus on the smaller ones."
Convince only one major shareholder
Having one or two particularly large shareholders makes no material difference, said Dijsselhof. But now he only had to convince one major shareholder. There used to be two.
UBS's stake in SIX has suddenly doubled to 34% following the CS takeover. This makes the big bank by far the largest shareholder. SIX is owned by around 120 financial institutions.
In the past, opinions on the services provided by SIX have repeatedly diverged widely. This is hardly surprising, as the interests of the various institutions in the Swiss financial center differ greatly in some cases. It is a very heterogeneous mix: including large banks, domestically oriented cantonal banks and pure asset managers.
Loss on SIX investment
The old and new UBS CEO Sergio Ermotti already had a major influence on the strategy of the stock exchange during his first term of office. As the only major bank in the financial center, this could become even stronger. In the past, Ermotti had at least not shied away from expressing any displeasure. Several years ago, he sharply criticized the SIX business model and threatened to look for alternatives.
Even if the SIX investment is currently more of a side issue for Ermotti, he cannot ignore it: in the fourth quarter of 2023, UBS had to digest a pre-tax loss of around 500 million US dollars due to the stock exchange group. This is because SIX suffered a loss of CHF 1 billion in 2023 after having to make high value adjustments.
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