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Bond Market News
UBS Downgraded to A, Credit Suisse Upgraded to A+ by Fitch on Acquisition Closure
June 13, 2023
UBS Group AG was downgraded to A from A+ and Credit Suisse AG upgraded to A+ from BBB+ by Fitch. This comes after the closure of the acquisition of Credit Suisse (CS) by UBS. Regarding UBS, Fitch expects the integration to initially weigh on the group’s operating profitability. They note that UBS has multiple issues to deal with where it needs to stabilize CS’s impaired revenue generation capacity, align its cost base with its future earnings potential and complete winding down non-core activities of CS. The complexity and challenging task would see the integration take several years, as per Fitch. Regarding Credit Suisse, the upgrade reflects new strong shareholder support from UBS. Fitch added that it has subsequently withdrawn the issuer ratings of Credit Suisse Group AG, as it ceases to exist following its merger into UBS Group.
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