UBS’s acquisition of Credit Suisse will create a global private banking behemoth and this is expected to cause issues in the competitiveness of the industry, according to GlobalData.
The UBS-Credit Suisse merger will create a combined private bank with almost $4 trillion in assets under management (AUM) as of end-2022, or 6.2 percent of the high net worth market, according to a report by London-based analytics firm GlobalData.
Its two nearest competitors – Morgan Stanley and Bank of America – only represent 78 percent of its total AUM. Within Switzerland, UBS and Credit Suisse have a combined $779 billion in AUM at end-2022, compared to $64 billion at Julius Baer, its closest rival in the country.
Competitive Issues
According to GlobalData, the move to combine the two banks, which were already private banking giants themselves, is likely to cause «significant competitive issues».
«The forced merger solves the immediate crisis at Credit Suisse. However, there will be a cost in terms of competition in the private wealth management space, especially in Switzerland,» said GlobalData head of wealth management analyst Andrew Haslip.
«The fundamental loss of competition will need to be addressed by regulators and competitors alike as they weigh up strategic decisions in 2023-24.»
