UBS, the Swiss multinational investment bank, is considering options for Credit Suisse's Swiss bank, which may include an initial public offering (IPO) while retaining the investment banking operations of the unit. The consideration is at an early stage, and UBS may not make a final decision for months. The future of Credit Suisse's business in Switzerland is closely watched, as a combination with UBS would create a dominant position in the Swiss loan market, raising concerns from lawmakers that it could lead to reduced competition.
Credit Suisse's Swiss bank is one of the lender's four operating units and is seen as the jewel in the crown, reporting pre-tax income of 1.5 billion Swiss francs ($1.7 billion) in 2022. Stripping out the investment banking operations would reverse a move made by Credit Suisse a few months ago. In January, Credit Suisse had moved the business from its broader investment banking division into the Swiss unit, according to Credit Suisse's 2022 annual report.
UBS Chief Executive Sergio Ermotti said that his bank was working on closing the merger with Credit Suisse by the end of May or early June. On a possible sale, Ermotti has said that all options for the Swiss business are on the table. Last Sunday, NZZ am Sonntag newspaper reported that UBS was working towards spinning off Credit Suisse's domestic unit, which it initially ruled out, due to growing public and political pressure.
The UBS takeover of Credit Suisse will create a banking giant overseeing more than $5 trillion in total invested assets, with UBS looking to bolster its investment banking business to compete with its neighbor. The two Zurich-based banks have been competitors for decades, competing head-to-head for mergers and share sales across the world.
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