Confidence in CS returns

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This is good news for UBS: customers seem to no longer turn their backs on Credit Suisse and withdraw their money from the crisis bank.

At least, a look at the demand deposits at the Swiss National Bank (SNB) shows this. These balances fell sharply last week. According to experts, this is likely to be related to the acquisition of Credit Suisse by UBS.

what’s happening in the banking industry

Federal and bank deposits in the SNB were CHF 532.2 billion on 7 April, down CHF 31.3 billion from the previous week. But two weeks ago, demand deposits had increased significantly – CHF 51.9 billion. Such an increase has never been seen before.

st. Thomas Stucki, 59, chief strategist at Wales Kantonalbank, has a suspicion: The spills were triggered by riots in the local banking industry. So they were probably involved with UBS’s takeover of Credit Suisse.

When asked by the AWP news agency, Stucki said, “While demand deposits rose sharply at first as the two banks wanted to provide liquidity, this situation has calmed down recently and they are reducing liquidity again.”

trust is back

Assumption: CS began repaying its first 50 billion liquidity aid from SNB in ​​mid-March. This means that the bank was finally able to stop the outflow of money from customers, which re-intensified in March. He doesn’t need the extra money to fill the gaps at the moment, as he has no client credit.

Re-establishing the confidence that CS’ carpet floor failed to do for months was apparently achieved by taking over by UBS. This bodes well for the launch of the new megabank.

However, there is a second possibility: Such a sharp decline in demand deposits in SNB may also have resulted from SNB’s foreign exchange sales. “However, the amount seems high for a week,” says Stucki, who has bet on the two big banks. (SDA/koh)

Source :Blick