UBS Faces Challenges: FINMA Demands Adjustments Following Credit Suisse Acquisition

The acquisition of Credit Suisse by UBS entails some complications that now require the attention of the Swiss Financial Market Supervisory Authority (FINMA). Due to the merger, FINMA has postponed the annual approval of recovery and emergency plans. UBS needs to enhance the integration of Credit Suisse to solidify its position as resolute and crisis-proof. According to the report by the Swiss Federal Council on "Too big to fail" (TBTF), legislative changes are necessary to provide authorities with more options and flexibility in times of crisis. FINMA found during the assessment of UBS's solvency as of December 31, 2023, that the integration of Credit Suisse has created obstacles. However, a planned restructuring could support UBS through a recapitalization from a single point of entry. UBS currently meets the requirements for loss-absorbing capacity. Nevertheless, there is a need to harmonize group structures, processes, and IT platforms. The currently identified challenges are being addressed through manual data aggregation until all processes run automatically again and data is fed into strategic systems. The current UBS emergency plan only envisages continuing the business and restructuring the business model. FINMA expects UBS to review its emergency and recovery plans. The annual assessment of these plans has been postponed to 2024 to allow for these reviews. Additionally, at the end of September, UBS announced the continuation of its partnership with the Mercedes-AMG PETRONAS Formula 1 Team. Since 2011, the bank has been part of the team's partner community, which has since won seven drivers' and eight constructors' championships. Iqbal Khan, Co-President of UBS Global Wealth Management, expressed delight at the continuation of this connection, which is based on shared values such as innovation and teamwork.