S&P Global Ratings revised its outlook on UBS UBS to negative on Monday, and said it expects the integration of large parts of Credit Suisse’s CS investment banking activities to carry material execution risk. The rating agency affirmed UBS’ A- issuer credit rating. The move comes after UBS agreed to take over Credit Suisse on Sunday in a move brokered by the Swiss government and central bank. “We believe that UBS’ management will prudently execute the CS integration and, due to the very high financial buffers resulting from the transaction and massive liquidity support from the Swiss central bank, we see sufficient buffers to limit emerging risks effectively,” S&P said in a statement. However, given the size and weaker credit profile of Credit Suisse and the complexity in winding down a large part of its investment banking operations, there is a risk that the combined group will see a weakening of its competitive position or will miss financial targets due to restructuring or litigation costs that could be substantial. “In our base case, we already anticipate client churn at the combined entity, particularly in wealth management and Swiss banking, where both entities have significant client overlaps,” said the agency.
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