A Reuters exclusive indicated the UBS Group AG (UBS) is going ahead with its Credit Suisse integration after the takeover in June 2023. However, the group’s significant size after this incorporation worries core investors, who feel it would set UBS on a collision course with regulators.
Key investors concerned about UBS size and regulator issues
The state engineered the Credit Suisse acquisition to prevent it from going under. With this takeover, UBS ended up with a balance sheet that exceeds $1.6tn, which is nearly double that of the Swiss economy. Since March 2023, when the intended takeover was announced, this financial giant’s shares jumped 50%.
In an email statement sent to Reuters, UBS contended that more focus should be on its balance sheet, which does not paint the whole picture. The bank claimed 20% are high-liquidity assets while 15% are locked in retail and individual-wealth mortgages.
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UBS further said its bank balance will shrink over the next three years. However, it did not give any specifics and wrote:
… elements to prepare for potential resolution are in place and will be further improved for the combined bank.
Reportedly, Ethos, a shareholder service company owning between 3% and 5% of UBS shares, raised concerns about the bank’s size and the lack of control regulators would have over such a large institution.
According to Reuters, an anonymous top 10 UBS shareholder feels the bank’s size would cause constant discord with regulators and legislators. UBS controls many banking sectors, such as commercial lending. Should it get into financial hot water, the Swiss economy may suffer.
