Why 25% of Swiss Industrial Companies are Unhappy with UBS Post Credit Suisse Takeover - Exclusive Survey Results Revealed!
By John Revill
In a recent survey conducted by Swissmem, it was found that nearly a quarter of Swiss industrial companies are dissatisfied with the service provided by UBS, particularly in lending, following its takeover of Credit Suisse in 2023. This revelation comes as a blow to UBS's attempts to demonstrate that it is not exploiting its dominant position in the market.
Since acquiring its main competitor, UBS has faced increased scrutiny amid concerns that Swiss businesses would suffer as a result of the expanded bank's significant market power. The survey conducted by Swissmem, which represents companies such as ABB, highlighted that 23% of respondents experienced a decline in the quality and terms of banking services, including interest rates, loan pricing, and credit limits.
This marks a significant shift from a previous survey conducted in October last year, where only 9% of firms reported negative impacts from UBS's emergency takeover of Credit Suisse. However, the latest survey indicates that 36% of companies fear that conditions could deteriorate further.
Out of the 231 companies surveyed by Swissmem in August this year, a mere 2% reported an improvement in banking services, while 68% noted no change, and 7% did not provide a response. Despite calls for a more in-depth investigation into the bank merger by the Swiss competition commission, the financial regulator FINMA announced in June that no further inquiries would be conducted.
In response to complaints about higher interest rates on loans, UBS stated that the adjustment of credit conditions reflects changes in the economic environment, including increased borrowing costs since central banks began raising rates in 2022 to combat inflation. The provision of credit emerged as the primary concern highlighted in the Swissmem survey, with 74% of dissatisfied companies noting a deterioration in conditions.
UBS reaffirmed its commitment to providing around 350 billion Swiss francs ($415 billion) in loans to the Swiss market, emphasizing its unwavering dedication. The bank's leadership has attributed the need to re-price credit to Credit Suisse's unsustainable business model, which offered credit on terms deemed too lenient.
In conclusion, the survey results shed light on the challenges faced by Swiss industrial companies following UBS's acquisition of Credit Suisse. The dissatisfaction with banking services, particularly in lending, underscores the need for further monitoring and potential regulatory intervention to ensure fair and competitive practices in the financial sector. Individuals and businesses alike should stay informed about these developments to make informed decisions about their finances and investments.