(News Bulletin 247) – The rating agency S&P has lowered the outlook for UBS’s rating to “negative”. On the other hand, it placed that of Credit Suisse under surveillance with positive implication.

S&P Global Ratings issues a small warning. The rating agency looked into the takeover of Credit Suisse by UBS for 3 billion Swiss francs, a small amount when you consider that Credit Suisse was still worth more than 6 billion Swiss francs on Friday.

For many observers, UBS is carrying out a fine operation, with very favorable terms. In addition to the scrapping price, the second Swiss bank has notably obtained guarantees of 9 billion Swiss francs from the Swiss federal government.

But this acquisition represents a number of risks for UBS. This is the point highlighted by the analysis of S&P Global Ratings. “We believe that the integration of Credit Suisse into UBS involves significant execution risk, given the size and weaker credit profile of Credit Suisse and, in particular, the complexity of liquidating a large part of Credit Suisse’s investment banking business,” the rating agency said.

UBS will stabilize Credit Suisse

As a result, S&P Global Ratings has downgraded UBS’s ‘A-‘ credit rating outlook from ‘stable’ to ‘negative’, meaning the agency can lower its rating within 6 to 24 months. .

However, “we believe that UBS management will execute the integration of Credit Suisse cautiously and, due to the very high financial protections resulting from the transaction and the massive liquidity support of the Swiss central bank, we believe” that the risks are limited, also underlines the rating agency.

S&P Global Ratings has also placed Credit Suisse’s “BBB-” rating on review with positive implications, a process that leads the agency to review an issuer’s rating within a very short 90-day period.

“We believe the acquisition of Credit Suisse by the stronger UBS Group will stabilize its business, funding and liquidity, while strengthening its governance and risk management standards,” S&P Global Ratings said.