Credit Suisse cranks up signal over merger with competitor UBS
Credit Suisse’s departing chair, Urs Rohner, gave the strongest indication yet that the bank may consider a combination with its biggest rival, saying a merger with UBS is not “unreasonable” and would bring benefits.
UBS and Credit Suisse are smaller than rivals in the US and less richly valued by investors, and a single institution would have more clout, Rohner told Swiss newspaper Schweiz am Wochenende. While declining to comment on “rumours ” about a possible combination, he said bank chairs have a duty to think about such scenarios.
His comments came weeks after CEO Thomas Gottstein said the bank will consider potential acquisitions. Two months ago, UBS chair Axel Weber rejected reports that Switzerland’s largest bank was planning to merge with its rival.
European banks are trying to bulk up in their home markets before long-awaited cross-border consolidation takes hold. While domestic mergers are heating up in countries such as Spain and Italy, the lack of a common deposit plan and banking union makes deals between financial firms in different countries less attractive.
There are many reasons why a merger of two large banks is complex, Rohner said, pointing to regulators as well as cultural issues and timing.
UBS’s Weber has been studying the feasibility of a megamerger with Credit Suisse as part of a regular thought exercise on future strategic options, people familiar with the matter told Bloomberg in September. The world’s largest wealth manager has explored the question with consultants but it has not raised the topic at the level of the executive board, the people said.
Weber tried to damp speculation about a tie-up with Credit Suisse when he said in October that his bank was not “looking for a bride”.
Prospects for a tie-up may also depend on the priorities set by UBS CEO Ralph Hamers, who took the helm last month. Hamers made his first mark on the bank’s board last week, boosting the responsibilities of high-ranking executives Sabine Keller-Busse and Iqbal Khan.
Keller-Busse, one of UBS’s highest-ranking women, will take over as head of personal & corporate banking and president of UBS Switzerland. Khan, cohead of global wealth management, assumes Keller-Busse’s role as president of the Europe, Middle East and Africa region, while keeping his current responsibilities.
The moves give Hamers an opportunity to make his own pick for the COO job, a key position in the bank’s push to improve its digital capabilities.
A merger between the two Swiss giants was likely to face regulatory obstacles, Andreas Venditti, an analyst at Vontobel, said in September. “Regulation would be the biggest hurdle in my eyes” because requirements are tougher the larger an institution is, he said.