Switzerland’s largest banks, UBS and Credit Suisse, are considering a merger, but it will not be easy to get permission from EU regulators, experts predict.
On Monday, the Swiss financial blog Inside Paradeplatz reported that the executives of UBS and Credit Suisse were considering a merger, and this topic was later taken up and developed by Bloomberg.
According to the agency, the initiator of the “Signal” project is the chairman of the board of directors of UBS Axel Weber, who is working on a deal with his colleague from Credit Suisse Urs Roner.
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According to Inside Paradeplatz, the former discussed the idea with Swiss Finance Minister Uli Maurer and an agreement on the merger of the two banks could be reached by early 2021. If successful, the deal will be the largest bank merger since the 2008 global financial crisis. -2009.
Wall Street has received skepticism about the possible emergence of a supergiant bank in Europe, as it contradicts the policy of European regulators to separate megabanks.
“I think regulation will be the biggest hurdle,” said Andreas Venditi, an analyst at Vontobel, who believes the merger of UBS with Credit Suisse will be “difficult…. The bigger the financial institution, the tighter.” are the rules. So I don’t think such a deal is likely. “
Experts from Bank of America share the views of their colleagues from Vontobel, but see “at least one scenario” in which the authorities can still bless the merger of the two banks. In addition, BofA predicts that UBS and Credit Suisse shareholders should benefit from the event through increased repurchase volumes and higher dividends.
The scale of UBS’s wealthy asset management business is much larger than that of Credit Suisse. In this respect, UBS is number one in the world, while Credit Suisse is only one of the top ten. But at the same time, both banks have approximately the same total amount of assets under management.
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Both credit institutions are undergoing a period of transformation: in February, the management of Credit Suisse changed, and in November the same should happen at UBS.
The merger of UBS and Credit Suisse will create a real banking supergiant, which will be able to compete on an equal footing with the American giant JPMorgan Chase, predicts the expert from the Geneva banking group Reyl & Cie Pedro Marineiro.