Moody’s Gives UBS a Thumbs-Up – and Ermotti a Reason to Smile
UBS just got a strong vote of confidence from Moody’s — and that’s music to the ears of CEO Sergio Ermotti and his team at the helm of Switzerland’s new banking giant.
In its latest release, the international rating agency Moody's confirmed the Aa2 long-term rating for senior unsecured debt and deposits of UBS and its branches, while upgrading the outlook from negative to stable.
But the good news didn’t stop there: UBS Group, the holding company, also saw an upgrade — from A3 to A2, with a similarly stable outlook, according to Moody’s London office.
A Pat on the Back for Integration Progress
Moody’s cited three key reasons for the more upbeat assessment:
- Progress in integrating Credit Suisse
- Improved profitability
- Robust capital and liquidity buffers
Cost-cutting measures – notably the planned $13 billion in savings as part of the ongoing restructuring — appear to be on track. Meanwhile, the group continues to benefit from its dominant position in wealth management and Swiss retail banking.
Moody’s also highlighted UBS’s ability to handle risk in capital market–sensitive areas. Large asset inflows may present potential risks, but the bank’s credible leadership, conservative risk culture, and deep liquidity reserves help mitigate them.
Boost from Bern
Another feather in UBS’s cap: the Swiss Federal Council’s proposed legislative package to reinforce the country’s too-big-to-fail regime. If fully implemented, Moody’s believes it will strengthen UBS’s capital and liquidity profiles, bolster crisis resilience, and boost market confidence even further.
Moody’s upgrade comes not long after Fitch also lifted its outlook on UBS this past May – a trend that suggests the megabank’s strategic moves and crisis response are hitting the right notes.
