UBS: the long road to recapturing lost billions

UBS CEO Sergio Ermotti visited Beijing last week, reaffirming the bank’s commitment to China. He reassured investors that UBS had “very limited” direct exposure to the Chinese real estate market, which is currently in deep trouble. He recalled that UBS was primarily in China to help the rich manage their wealth. However, with the acquisition of Credit Suisse, the bank inherited a joint venture in China. This joint venture is currently under review and all options are being examined; no decision has yet been taken.

With regard to the integration of Crédit Suisse, Mr. Ermotti expressed his satisfaction. During the quarter, the bank had already recovered a large amount of money from customers who had withdrawn just before the takeover. Nevertheless, he stressed that he did not believe that UBS would be able to recover the full USD 200 billion that clients had withdrawn from Credit Suisse.

In Switzerland, some voices are publicly speaking out against the integration of the two big banks. The CEO of Swatch, for example, said in an interview that he deeply regretted the demise of Crédit Suisse, as it would open the door to foreign lenders. He would have preferred UBS to leave the Swiss part of Crédit Suisse on the stock exchange and for the two banks to continue to co-exist. UBS could have kept 30% of the shares, while other Swiss companies such as Swatch, Schindler and EMS-Chemie could have taken significant stakes.