Credit Suisse-UBS Merger Derails China Bank Incorporation Plan

Author: Akanksha Bakshi | May 31, 2023 08:28am

• Credit Suisse Group AG (NYSE:CS) has scrapped plans to set up a locally incorporated bank in China to avoid a potential regulatory conflict arising from its merger with UBS Group AG (NYSE:UBS).
• Credit Suisse had been planning to establish a local bank in China for years. The report added that a locally constituted bank would have expanded its onshore wealth management business and increased its presence in the country, reported Reuters, citing two sources.
• Credit Suisse made the choice because UBS, which recently acquired Credit Suisse as part of a government-managed rescue of its smaller rival, already has a domestically established bank in China.
• Read: UBS Cites $17B Hit From Rushed Credit Suisse Takeover, Blames Hasty Due Diligence
• The report mentioned that with overlapping businesses in investment banking, wealth management, and fund management, China could be one of the most challenging markets for the two banks to merge their local operations.
• Also Read: Where Is Our Bonus? Credit Suisse Employees Plan Lawsuit Against Swiss Regulator Over AT1 Bonus Losses Due To UBS Rescue
• Price Action: UBS shares are trading lower by 1.75% at $19.13 premarket on Wednesday. CS shares closed lower by 2.98% at $0.85 on Tuesday.

Posted In: CS UBS