As an act of public-private crisis management, UBS Group’s rescue of Credit Suisse looks like undefineda ringing success.
UBS bought while the blood was flowing at crosstown rival Credit Suisse in March and bagged an enormous payday. Or did it?
Credit Suisse is still losing $2 billion every quarter, estimates Andreas Venditti, head of banks research at Bank Vontobel. The gaping wound is its investment bank, where revenue plummeted 78% year-over-year in the latest results, costs just 15%. UBS also added $4.5 billion in litigation provisions, preparing for the avalanche of lawsuits that followed Credit Suisse’s demise.
UBS boasts a well-regarded management with deep restructuring experience. Ermotti rescued UBS itself from dire straits after taking the helm in 2011, shrinking a deadweight investment bank and doubling down on private banking. UBS brought him out of retirement in April to repeat the trick with Credit Suisse.
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