2024 ‘crucial year’ for UBS-Credit Suisse merger
UBS boss Sergio Ermotti already sees “a lot of progress” in the integration of Credit Suisse into UBS. However, significant restructuring measures and optimisations are still needed before the bank can fully exploit the advantages of the merger.
The integration is “a marathon, not a sprint” emphasised Ermotti on Wednesday, according to the text of the speech at the bank’s annual general meeting in Basel. The year 2024 will be a crucial year for the big bank.
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The most important priorities for the first half of 2024 include the merger of the two parent companies and the transfer of the United States business into a single intermediate holding company. “The merger of our Swiss banks should take place before the end of the third quarter,” said Ermotti.
Only after the merger of these companies could the necessary efficiency gains in terms of costs, capital and financing be realized, said the UBS boss. From the second half of 2024, UBS can then gradually decommission the old Credit Suisse platforms. “This process will continue until 2025 before we move towards the target state in 2026.”
In his speech, the UBS CEO criticised the argument that UBS had an implicit state guarantee as “factually incorrect”. He referred to UBS’s loss-absorbing capital totaling around $200 billion.
“UBS’s risks are borne by shareholders, and by holders of AT1 instruments and TLAC loss-absorbing bonds – not by taxpayers.”
For UBS, this also means that the financing costs are structurally significantly higher than for banks with a state guarantee, he emphasised.
The ratings that UBS receives from rating agencies are also lower than those of banks that enjoy an implicit or explicit government guarantee.
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Translated from German by DeepL/mga
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