After the accelerated purchase agreement of its rival Credit Suisse over the weekend, UBS is already preparing for a difficult digestion. The union of the two rival banks will give rise to a mammoth group with 1.5 trillion in assets under management full of inefficiencies and overlaps that UBS will have to resolve through a complex restructuring.
The difficulties in absorbing Credit Suisse meant that yesterday the credit rating agencies Moody's and S
The two corporations have 120,000 employees worldwide and UBS plans to cut thousands of jobs to save $6 billion a year. The duplications are particularly significant in Switzerland, where unions and the political class are already demanding a specific solution that includes a possible split of the local business.
In addition, UBS plans to divest Credit Suisse's investment banking business, which is less profitable than wealth management.
The restructuring may be accompanied by litigation and an exceptional control by the Swiss authorities that revolts the workers of UBS. Ethos Foundation, a firm that accounts for between 3% and 5% of Credit Suisse's capital, yesterday announced possible legal action against this weekend's sale of the bank, which it says does not shareholder rights have been preserved.
They are the main victims of the operation proposed on Sunday and among them are giants such as Pimco and Invesco, to which millions of losses are attributed.
Meanwhile, the Swiss Government has agreed to temporarily suspend part of the bonuses for Credit Suisse executives in accordance with the country's legislation, which allows for the imposition of measures of this type "if a systemically important bank receives direct or indirect state aid from federal funds".
Despite these difficulties, UBS shares rose 12% on the stock market yesterday and the European banking sector recovered in the markets. Stock markets recovered between 1.5% and 2% in benchmark indices in London, Paris and Frankfurt, while in Spain the Ibex was up 2.45%, the biggest since in October of last year, encouraged precisely by the banks. Sabadell progressed by 7.4%, compared to BBVA's 5.3%, CaixaBank's 5.1%, Bankinter's 5% and Santander's 4.6%.
Part of the gains were due to the ECB's messages of confidence in the financial system and the announcement on Monday by the European authorities that, in the event of a bank rescue, pre-agreed orders will be respected, despite the decision of the Swiss authorities to break the orthodoxy and punish the CoCos, which has generated a small crisis in the market for issuing this type of debt.
The president of the ECB's supervisory board, Andrea Enria, assured yesterday in an appearance at the European Parliament that the trust of depositors in European banks is "strong" and that the entities are "well positioned". However, he warned that interest rate hikes will require banks to pay more attention to the emergence of risks associated with liquidity or funding problems. In addition, he ruled out restricting the distribution of dividends by European banks.
