Research Update: Outlook On UBS Group Revised To Negative On Execution Risk From Credit Suisse Acquisition; Ratings Affirmed

On March 19, 2023, UBS announced the acquisition of Credit Suisse (CS). We expect the integration and anticipated rundown of large parts of CS' investment banking activities will carry material execution risk given CS' size, complexity, and risk profile. We believe that UBS' management will prudently execute the CS integration and, due to the very high financial buffers resulting from the transaction and massive liquidity support from the Swiss central bank, we see sufficient buffers to limit emerging risks effectively. We revised our outlook on Swiss holding company UBS Group AG to negative from stable, reflecting pressure on the group's stand-alone creditworthiness linked to execution risk from the integration. We also affirmed our 'A-/A-2' issuer credit ratings on UBS Group.

...- On March 19, 2023, UBS announced the acquisition of Credit Suisse (CS). We expect the integration and anticipated rundown of large parts of CS' investment banking activities will carry material execution risk given CS' size, complexity, and risk profile. - We believe that UBS' management will prudently execute the CS integration and, due to the very high financial buffers resulting from the transaction and massive liquidity support from the Swiss central bank, we see sufficient buffers to limit emerging risks effectively. - We revised our outlook on Swiss holding company UBS Group AG to negative from stable, reflecting pressure on the group's stand-alone creditworthiness linked to execution risk from the integration. We also affirmed our 'A-/A-2' issuer credit ratings on UBS Group. - At the same time, we affirmed our ratings on the group's related entities, including our 'A+/A-1' ratings on core operating subsidiaries such as UBS AG. - The stable outlook on UBS AG and other core operating...

Research Update