As UBS integrates units from Credit Suisse, it's interested in its traditional investment bank. It's far less true for Credit Suisse's Global Markets Business. Clients need to make a choice.
Credit Suisse will begin reducing the volume of new business in its Global Markets unit starting September 22, according to a letter to clients seen by «Reuters».
Existing Credit Suisse clients won't be able to increase their positions with the bank or extend maturities, and will instead have to turn to UBS.
«Going forward, UBS shall focus on consolidating new client activity through UBS legal entities,» according to the letter.
Lower Balance Sheet Risk
The business with securities and currencies, important to Credit Suisse on Wall Street over the years, will largely be wound up. UBS doesn't want investment banking accounting for more than 25 percent of risk-weighted assets on its balance sheet. It's currently around 30 percent.
As the Credit Suisse division with the most staff, trading is a major expense, with investment banking costing about $7 billion annually. If UBS manages to quickly wind it down, it will be close to its savings target of $8 billion by 2027. While there has been talk of layoffs in traditional investment banking with corporate advisory and capital markets transactions (global banking), the trading unit has remained quiet.
Credit Suisse Switzerland's Fate
UBS presents its second-quarter results tomorrow, the first since taking over Credit Suisse earlier this year. UBS could reveal its plans for Credit Suisse's domestic business, which was previously said to be excluded from integration.
