UBS fails to drain Credit Suisse’s wealth scare in Spain. When almost four months have elapsed since the forced purchase of the second by the first that has ended in the creation of a banking giant, doubts about the plans of the private banking business in this country continue to weigh on investors, who maintain withdrawals from money. Between March 1 and June 30, the manager has lost almost 380 million, or what is the same, 35% of its funds, according to Inverco data.
Although the truth is that the horrible of these departures occurs in March, the trickle has been a constant month by month and goes from managing more than 1,180 million at the end of 2022 to just over 700 million as of June 30, half that be only one year old. This decline has been noted on its behalf within the total set of investments, from 0.39% last December to 0.21% at the end of the semester, after losing the barrier of 1,000 million assets under management. The reduction in assets has occurred at a time of record net deposits in Spain, in which investment funds in Spain as a whole concentrate more than 330,000 million.
The forced acquisition of Credit Suisse by UBS has forced the new Swiss giant to carry out a titanic restructuring of its global teams, changes that have also affected the private banking area. The problem lies in the particular situation of UBS in Spain, where it dispensed with the high-net-worth management branch a year ago after its transfer to Singular Bank for 200 million. An agreement that arose among its clauses a non-competition agreement, so in practice it cannot operate in national territory.
Despite this, in mid-May it revealed its intention to stay with the private banking business in the midst of warnings from Singular Bank to take legal action. While the legal confrontation is still unclear, its objective for the moment is to “grow this business in the future”, the National Securities Market Commission has given the green light to the transfer of some Sicavs and funds from Credit Suisse to UBS.
One month since the merger became effective
This July 13 will be a month since the Credit Suisse titles said goodbye to the Swiss parquet before the integration into UBS through a share exchange that valued the operation at 22.48 shares of the now extinct entity for each one of the aforementioned UBS. In this period, the Swiss firm has experienced a 2% drop in the stock market, up to 18 Swiss francs (around 18.63 euros), while in the annual calculation it rises almost 5%, a percentage with which it doubles the SMI , the Swiss stock market reference. Analysts give it a target price of 21.48 Swiss francs (around 22 euros) after slightly downgrading buy recommendations. At the present time, 48% advise including it in their portfolio, compared to 18% who are committed to selling.
The bank, which doubles the Swiss GDP with a market value of 1.6 trillion euros, has delayed the presentation of results until August 31 in order to buy time to combine the balances of both firms. Its activity was hampered in the first quarter of the year, after earning 931 million, 52% less. The company alleged at the time the impact derived from the provisions related to the litigation of residential mortgage-backed securities (RMBS) in the United States, to which was added the lower income from commissions and interest margin.
UBS estimates the impact derived from this acquisition at 17,000 million dollars, 13,000 million definitions between assets and liabilities, while 4,000 million are reserved for legal battles. All in all, it is expected that the gains from the so-called “goodwill” amount to 34,000 million dollars.
