Wed, May 3rd 2023
(Keystone) UBS wants to complete the takeover of Credit Suisse “at the end of May or beginning of June” UBS CEO Sergio Ermotti said at an event in Zurich on Wednesday.
The banks are still waiting for the approvals of the supervisory authorities in the U.S., the EU and other countries. Until the transaction is completed, UBS will also be restricted in its communication, emphasized Ermotti at his appearance at the “Finanz 23” financial fair.
“We will act quickly, but not rashly,” he said. Ermotti was reluctant to comment on the future of Swiss business: “All options are on the table.”
Ermotti confirmed that job cuts as part of the takeover would be unavoidable. However, he was convinced that a large part would be dealt with through fluctuations and retirements. At the same time, the UBS boss promised a generous social plan in the event of layoffs.
At the same time, Ermotti denied that the “new UBS” was too big for Switzerland. Both UBS and CS have significantly reduced their balance sheets in recent years, he emphasized. In any case, the decisive factor is not the size of the balance sheet, but the risks it contains. For example, the Silicon Valley Bank, which triggered the current banking crisis with its difficulties, only had a market share of 1% in the USA, he emphasized.
Ermotti also put UBS’s market share in Switzerland into perspective: in many cantons, the cantonal banks have a higher market share in the mortgage business than the big banks and the Raiffeisen Group has a denser branch network. Although UBS offers a “comprehensive range,” there is competition “in every individual segment.”
“We will do everything we can to ensure that there are no losses for taxpayers,” Ermotti promised. He pointed out that his bank would have to absorb potential losses of CHF5 billion before the government guarantee kicked in. He was also convinced that losses for the federal government and the SNB from the liquidity loans were “extremely unlikely.”
The UBS boss was not very happy about media headlines about a new “monster bank” UBS – even if he could understand the concern of the population. Nevertheless, the discussion should be “fact-based,” he emphasized. There is now an opportunity to create something “positive” from the takeover of CS by UBS. This is in the interests of customers, the financial center and the Swiss economy.
According to Ermotti, politicians also have an important role to play: But they should “not play with fire” and keep an eye on Switzerland’s long-term interests. He also attributed the heated political discussion about the CS rescue to the upcoming election date: “I hope October will come soon.”
However, Ermotti showed no understanding for demands for a separate banking system or for much stricter rules regarding the capital cover of banks. Credit Suisse got into the crisis because it lost confidence after a series of setbacks and was no longer profitable in the long term. “You can’t bring about customer trust and profitability – not even through more capital and liquidity.”
This article was re-printed with permission from Keystone SDA.
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