All articles tagged with #swiss economy
UBS CEO Sergio Ermotti defends the bank's enlarged balance sheet following its takeover of Credit Suisse, stating that concerns are fueled by academic indoctrination and urging the public to consider the low-risk nature of the new entity. Ermotti emphasizes the bank's contribution to the Swiss economy and highlights the need for informed opinions, while acknowledging lingering reservations among the Swiss population.
The Swiss National Bank (SNB) has decided to keep interest rates unchanged at its quarterly monetary policy meeting, ending its streak of five consecutive rate hikes. The SNB had been gradually lifting rates out of negative territory since June 2022 but cited the significant tightening of monetary policy and subdued growth outlook as reasons for maintaining the current rate of 1.75%. Inflation in Switzerland remains below the central bank's 2% target, and the Swiss franc has been performing strongly. The SNB indicated that further tightening may be necessary in the future to ensure price stability. The main risk to the Swiss economy is a potential global economic slowdown, and the SNB expects the economy to grow by around 1% this year.
UBS Group has announced plans to cut over $10 billion in costs and eliminate 3,000 jobs in Switzerland following its takeover of Credit Suisse. The job cuts represent approximately one in 12 Swiss jobs and highlight the scale of the shake-up at the newly merged banking giant. UBS aims to fully integrate Credit Suisse's local arm, which was the only profitable division of Credit Suisse last year, rather than spinning it off. The cost-savings target of over $10 billion by the end of 2026 has been raised from an earlier estimate of $8 billion by 2027. UBS shares rose over 5% after the announcement, and the bank expressed optimism about its short-term outlook. However, the decision to absorb Credit Suisse's local operation is contested in Switzerland, with some arguing that spinning it off would have avoided negative impacts on employment and fair competition.
UBS, Switzerland's largest bank, reported a second-quarter profit of $28.88 billion, surpassing analysts' expectations, in its first earnings report since completing its takeover of Credit Suisse. The profit was primarily driven by negative goodwill on the acquisition. UBS CEO Sergio Ermotti stated that the bank is focused on regaining client trust, reducing costs, and creating economies of scale for future growth. The integration of Credit Suisse's domestic banking unit into UBS is expected to be completed by 2024. The acquisition was part of an emergency rescue deal mediated by Swiss authorities.
Swiss Finance Minister Karin Keller-Sutter sees no obstacles to UBS's state-sponsored takeover of Credit Suisse, which will be discussed in an extraordinary session of the Swiss parliament next week. The minister defended the government's intervention, which critics have said came too late and promised too much taxpayer support for a bank that paid out billions in bonuses to executives. The new combined bank will have $1.6tn in assets and more than 120,000 staff, and Keller-Sutter said the structure of UBS would have to be considered in the future.