UBS acquiring CS

washingtondullestowashingtonbullets

UBS getting the CSFB from the fire sale and likely getting their TMT bankers back from SVB would mean UBS reasserts it's position atop the league tables. Party like it's 2002 baby. Given their inclination towards steadier revenue streams (wealth management), this could be a slam dunk of Swiss regulators rubber stamp it.

Hot take, but if this crisis worsens I strongly believe UBS and Piper will emerge much, much stronger than before. Piper of course is boom or bust, but given their excellence in regional bank M&A + TRS acquisition, they're hypothetically well-equipped to weather the storm. Same goes for Stifel/KBW. 

Even though CS has got some very strong coverage groups (probably stronger than most at UBS), I highly doubt if UBS would want anything to do with more risky lending and advisory business, this would literally be them going against a successful strategy they have been following for last couple of years. Gone are the days when Banks were looking to consolidate to get leg up in Advisory & lending business, every bank has realized focusing on AM/WM is the way to go for them.

I think, "Bad bank" will be sold in pieces or the disposal cost of it will be absorbed by SNB with UBS acquiring asset and wealth units. And CSFB will be left alone to face it's own fate in the hands of Klein.

Didn't know SVB was into IB

JulianRobertson

Side point - I know it's the world's tiniest violin playing for these chaps and chapettes, but you need to feel for the lifer MDs who've accumulated so much stock in CS...

Yeah, that truly sucks. I understand the intent of banks moving to stock bonuses instead cash bonuses so execs have skin in the game, but you also get a situation where one bad group can screw over the entire company. Banks don't have a lot of slack. If Archegos was it, and there wasn't Citrix behind it, we might be having a different conversation now. Only takes a few bad decisions.

Another thing that no one is talking about, I wonder if the Swiss government regrets abandoning their historic neutrality when it comes to Russia. I bet they'd sure be happy to have some Russian deposits right now.

You have to feel for Arab investors as well. A decade ago Qatar Investment Authority invested in CS at 30 CHF, and within 4 years, it dropped by 50% within 4 years. And once the bank had lost 90% of the value, the Saudi National Bank came to rescue and invested around 10% of total market value (overall ownership from gulf investors is at 20% currently).

Although, you might argue that Saudi National Bank chairman could have been less dramatic in his comments, especially at a critical time in banking sector, it will surely be a hard pill to swallow for gulf investors.