UBS and Credit Suisse want to create the largest bank in Europe
Two financial giants UBS and Credit Suisse plan to create the largest bank in Europe. Now the process is at the stage of negotiations, and the institution will start full-scale work by the end of this year.
Swiss bank executives are considering a merger, which would allow them to become direct competitors to HSBC and major US banks. The initiator of this Signal project was Axel Weber from UBS, who intends to be the head of directors of the new institution. Although before that it was reported that Weber will retire in 2022. Credit Suisse is represented by Urs Roner. The parties plan to agree on all the details by the end of the year and to start full-scale operation of the united bank. Now the project is under negotiation, including the Swiss Ministry of Finance.
The merger of reputable financial institutions is an excellent solution for both shareholders and investors. Already after this news, UBS Bank’s securities have increased in price by more than 21% and Credit Suisse – by 31% on the London Stock Exchange.
Credit Suisse has a staff of about 50 thousand people, among which 15 thousand work in Switzerland. UBS Bank employs 70 thousand people, and in Switzerland itself – about 20 thousand. After the merger it is planned to reduce the staff by 10-20%, which is about 15 thousand people in all offices of institutions.
UBS Bank manages the largest amount of capital in the world, among its clients almost half of the famous people, a huge number of billionaires. The Financial Stability Board has included it in the list of systemically important institutions. In this regard, the work of the bank is controlled by special rules, and work with capital is carried out on more stringent criteria. The year of foundation is 1862, when the bank was opened in the Swiss city of Winterthur.
In 2016, the institution was reformed into a holding company, which became necessary when changing the banking legislation in the country.
The most successful for UBS over the past 10 years was the second quarter of 2019, when the bank managed to increase net profit by 1% and it was 1.4 billion dollars. At the same time the revenue decreased insignificantly from 7.6 to 7.5 billion dollars. The shares rose in price by 1.1%.
Credit Suisse is the second largest in Switzerland after UBS. It was founded in 1856. After 2014, the bank was transformed into a holding company, which has several major directions.
Credit Suisse activities are often criticized for tax evasion. The most notorious case was in 2014, when the bank paid a fine of $2.6 billion and several employees were sentenced to prison terms.