UBS CEO says integrating Credit Suisse will become a ‘case study’ for future big bank mergers

The
mammoth
integration
of
failed
bank
Credit
Suisse
into
its
former
rival
UBS
will
act
as
a “case
study,”

UBS
CEO
Sergio
Ermotti
said
Friday,
one
that
will
show
that
big
bank
mergers
should
be
allowed.

“It’s
going
to
be
a
case
study
to
be
evaluated
globally,
but
also
particularly
in
Europe,
where
eventually
the
necessity
of
creating
stronger
banks,
and
stronger
and
more
competitive
banks
from
a
global
standpoint
of
view,
is
in
my
point
of
view
a
necessity,”
Ermotti
told
CNBC’s
Steve
Sedgwick
at
an
event
at
the
Ambrosetti
Spring
Forum
in
Italy.

“Of
course,
we
can’t
just
rely
on
a
crisis
to
create
or
facilitate
the
merger
of
banks,”
Ermotti
said.

“It’s
good
to
have
strong
players
that
can
be
part
of
the
solution,
like
UBS
was
in
the
Credit
Suisse
case.
…
But
it
cannot
be
just
that
part.
So
in
that
sense,
I
think
that
the
real
issue
is,
there
has
to
be
a
political
desire
to
facilitate
something
like
that.
So
it’s
not
the
reality
of
today,”
he
added.

Credit
Suisse
collapsed
in
March
2023
after

years
of
underperformance,
scandals
and
risk
management
crises.
UBS
in
June

completed
its
takeover
of
the
167-year-old
bank
in
a
deal

controversially
brokered
by
Swiss
authorities.

The
Swiss
National
Bank

has
said
the
size
of
the
new
entity
flags
potential
competition
issues that
will
need
to
be
monitored.

Ermotti
said
Friday, “The
good
news
is
that,
in
my
view,
in
many
countries,
there
is
a
recognition
that
they
want
to
protect
their
banks
or
financial
institutions
as
national
champions,
which
is
an
implied
or
explicit
recognition
of
their
value
for
their
economies.”

“But
the
bad
news
is
that
they
don’t
realize
that
in
order
to
really
be
meaningful,
and
go
to
the
next
level
of
their
contribution
in
their
economies,
they
will
need
to
be
also
more
competitive
globally.
But
without
a
banking
union,
without
a
capital
markets
union,
it’s
going
to
be
very,
very
difficult
for
Europe
to
compete
with
U.S.
large
banks.”

Unlike
in
the
U.S.,
European
economies
continue
to
rely
on
the
banking
sector
for
business
financing;
and
Europe
has
a “completely
different
playing
field
and
a
lack
of
critical
mass,”
Ermotti
said.

“So
I
hope,
I’m
not
so
convinced
it’s
going
to
happen
soon,
but
I
hope
eventually
one
day
those
kinds
of
mergers
between
big
banks
will
be
allowed
and
we
can
contribute
to
that
by
showing
that
it’s
possible.
In
the
meantime,
I
think
that
in
many
countries,
critical
mass
and
synergies
can
be
created
by
further
rounds
of
local
mergers,”
he
said.