UBS braces for most complex phase of Credit Suisse integration

The Swiss banking group will begin the migration of former Credit Suisse client accounts in Switzerland to the UBS platform in the second quarter, it said in its annual report published Monday. UBS sees this as the most complex phase of the entire integration process of its former rival.

UBS stepped in to acquire its cross-town competitor in 2023, in a deal engineered by Swiss authorities at the height of a banking crisis that led many Credit Suisse customers and investors to lose confidence in the bank. Since then, UBS has been working to merge the two banks’ structures, shrink Credit Suisse’s portfolio and integrate staff and customers.

Preparations are well under way for the account migration in Switzerland, UBS said. Migrations of wealth-management client accounts in Luxembourg, Hong Kong, Singapore and Japan were completed in the fourth quarter, it said.

The move comes at a time UBS is awaiting an update of Switzerland’s “too big to fail" banking laws, aimed at avoiding bailouts, which the government has indicate will result in higher capital requirements for the bank. Analysts say this could limit UBS’s ability to return money to shareholders.

A Swiss parliamentary report into the crisis at Credit Suisse said the bank could have been saved if the country’s financial regulator took a harder line overseeing it and enforcing capital rules.

UBS said it remains committed to a constructive dialogue, but that the current debate often overlooks the difference between today’s UBS and the former Credit Suisse.

“Excessive capital requirements or other undue limitations on our international business would penalize our diversified global presence, run counter to the government’s financial sector strategy and damage the competitiveness of Switzerland’s economy, raising the cost of capital for homeowners and businesses," UBS Chairman Colm Kelleher and Chief Executive Sergio Ermotti said in a letter included in the report.

UBS is providing for almost $20 billion of additional capital resulting from the acquisition of Credit Suisse and is already subject to capital requirements that are among the highest for any global systemically important bank, it said.

The bank said it is also facing uncertainty because of potential for significant policy developments from the new U.S. administration and geopolitical risks. While 2025 should be another resilient year for the global economy, particularly in the U.S., economic uncertainty is expected to remain high and the prospect of higher U.S. tariffs could prove a growth headwind in Europe and Asia, UBS said.

Progress on the integration of Credit Suisse and a strong financial performance were among the reasons UBS’s board assessed to approve a pay package for Ermotti of 14.9 million Swiss francs ($16.9 million) last year, including benefits and contributions to his retirement benefit plan. This is up from 14.4 million francs in 2023, according to the report.

Write to Adrià Calatayud at adria.calatayud@dowjones.com