UBS not too big despite Credit Suisse buyout: CEO
The new expanded UBS is not too big for Switzerland following the bank's emergency takeover of fallen rival Credit Suisse, Chief Executive Officer Sergio Ermotti said on Tuesday. "UBS is not too big – size is not only about the relationship of the balance sheet to the country's GDP," Ermotti told an event in Zug, Switzerland. UBS completed its emergency takeover of Credit Suisse in June, forging a Swiss banking and wealth management giant with a US$1.6 trillion balance sheet. The figure is far larger than the entire economic output of Switzerland which stood at $878 billion in 2022 at current exchange rates. Ermotti said 20 percent of the combined bank's balance sheet was relatively stable and invested in the Swiss property market, while the bank had more than US$200 billion in loss-absorbing capital. The executive, who returned to UBS in April to steer the Credit Suisse takeover, was also critical of Credit Suisse. "Credit Suisse went under because it had a business model for years which was simply not right. The bank unfortunately made billions in operating losses over the last few years and could have gone on making losses," he said. "The bank was no longer viable." Credit Suisse failed after rattled investors withdrew billions after a series of losses and missteps, triggering a liquidity crisis. Ermotti said some of the money had been transferred to UBS, while some had gone to other banks in Switzerland and even abroad. Still, he was optimistic that Credit Suisse could be integrated successfully into UBS. UBS last week said it would reduce costs by US$10 billion , saying it will axe 3,000 jobs in Switzerland alone. "More than 99% of the people at Credit Suisse are good people, people with integrity," Ermotti said. "I don't think it will be a problem to integrate Credit Suisse." (Reuters)