Categories: Market

Economist forecasts profit loss for UBS

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The takeover of Credit Suisse (CS) could prove costly for UBS: “Mergers between established banks like UBS and CS, which are no longer fast-growing and less profitable than their competitors, hardly work,” said finance professor Arturo Bris. (archive image)

“On average, profits after the merger are 4 percent lower than before,” the professor at private business school IMD in Lausanne and Singapore said in an interview with Tamedia newspapers on Monday. “Usually there is almost no synergy effect.” He comes to this conclusion because he has studied thousands of bank mergers around the world.

The only synergy in CS and UBS is low costs. “But this potential is limited and is associated with lower revenue, for example, as client funds flow out,” the economist said. Confidence in the predictability of the Swiss financial center was eroded.

Bris advocated for CS to continue as UBS’s sister bank. The management of the two banks should be clearly separated. “The only good model for Switzerland is for the two banks to operate separately in the retail sector.” (SDA)

Source :Blick

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