International Finance

SNB advises UBS and Credit Suisse to strengthen credit planning

UBS, Credit Suisse, Swiss National Bank, FINMA
The Swiss National Bank said that the two banks have ‘slightly improved their capital situation,’ despite moderate dip in economic and financial condition

The Swiss National Bank said that UBS and Credit Suisse have improved their capital positions but must work on strengthening their crisis planning. The central bank cited that these analysis are from the conclusions of the Swiss Financial Market Supervisory Authority (FINMA).

The central bank in its 2019 financial stability report, said, “The Swiss big banks Credit Suisse and UBS have slightly improved their capital situation overall, in spite of the moderate deterioration in economic and financial conditions.”

According to FINMA, the multinational investment banks such as UBS  and Credit Suisse need to put in more effort in order to ‘demonstrate that systemically important functions can be maintained without interruption in a crisis’.

The two banks have time till the end of 2019 to prepare their resolution plans, according to several media reports. The Swiss National Bank is responsible for overseeing the country’s financial stability. The bank said that the country’s domestic banks are exposed to continued risks from estate lending and mortgage markets.

UBS and Credit Suisse are Switzerland’s multinational investment banks.

Last year, UBS’ wealth management accounted for more than 55 percent of its total revenues, while Trading division’s contribution has remained stable at around 18 percent.

The bank has directed more focus towards its wealth management business since the financial crisis. That said, Credit Suisse has also focused on expanding its wealth management business in the last few years.

Now Credit Suisse’s wealth management business contributes 40 percent of its total revenues compared to less than 30 percent before the financial crisis.

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