A thought provoking idea came out of a banker from JP Morgan as he said that the two Swiss investment banks, Credit Suisse and UBS, should merge into one investment bank that would be better able to compete. Are you guys giving the idea any merit? Do you think this could actually work?
To be fair the two banks have had a rough time. Credit Suisse has been laying of thousands of their employees and announced another 1,500 layoffs last week. UBS hasn't faired much better either being the former home of the the rogue trader that lost around $2 billion.
The venture could also be very profitable for both, reducing costs and earning higher returns. The combined duo could bring in around $19.9 billion in revenue, which would place it in the top 5.
I personally think that there is no way this could happen. Besides the logistical problems investment banking egos probably wouldn't gel if two companies came together. But what do you guys think? Could it actually happen?
Pretty sure that would be a monopoly. Remember AT&T/T-Mobile?
A monopoly over what? Only the IB arms would merge into a standalone joint venture, not the rest of the banks.
EDIT: Oh I see, you mean a monopoly in terms of I-banking within Switzerland.
Doesn't UBS want to basically scrap their IBank altogether and just leave the areas that support the wealth management and private bank? So couldn't CS come in and scoop up the IBank?
Basically "shrink" it, which will most likely involve the trading operations within the investment bank being shrunk.
For one, egos would never even agree on the bank that comes first in the name. Whats it gonna be, Credit BS?
I think CS would buy out the IB arm of UBS and let UBS operate the Wealth and Asset Mgmt side of the business.
I domt see that happen, the swiss regulators would never allow this; this would create too much systemic risk. All the other comments above are also pretty valid (especially the name). Never gonna happen'.
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