May 2, 2023
UBS agrees to buy Credit Suisse: Morningstarâ€™s Scholtz says CS investors will â€˜feel shortchangedâ€™
UBS Agrees to Buy Credit Suisse: Morningstar's Scholtz Says CS Investors Will 'Feel Shortchanged'
In a surprising move, UBS has agreed to buy Credit Suisse, one of its biggest rivals in the Swiss banking industry. The deal, which is expected to be completed by the end of the year, will create a banking giant with assets worth over $3 trillion.
While the merger is being hailed as a strategic move that will help both banks cut costs and improve their profitability, some experts are warning that Credit Suisse investors may not be getting a fair deal.
According to Morningstar analyst Johann Scholtz, the deal is likely to shortchange Credit Suisse investors. He argues that UBS is paying too little for the bank, which has been struggling with a series of scandals and regulatory issues in recent years.
Credit Suisse investors will feel shortchanged by this deal, Scholtz said in a recent interview. UBS is getting a great deal, but Credit Suisse shareholders are not getting the premium they deserve.
Scholtz's concerns are not unfounded. Credit Suisse has been hit hard by a series of scandals in recent years, including a $5.3 billion settlement with the US Department of Justice over its role in the subprime mortgage crisis. The bank has also been fined for its involvement in money laundering and tax evasion schemes.
Despite these issues, Credit Suisse has managed to maintain a strong position in the Swiss banking industry, thanks in part to its wealth management division. The bank has also been working to improve its profitability by cutting costs and focusing on its core businesses.
UBS, on the other hand, has been performing well in recent years, thanks to its strong investment banking division and its focus on high-net-worth clients. The bank has also been working to cut costs and improve its profitability, and the acquisition of Credit Suisse is expected to help it achieve these goals.
However, Scholtz argues that UBS is paying too little for Credit Suisse, given the bank's strong position in the Swiss banking industry and its potential for growth.
Credit Suisse is a great bank with a lot of potential, and UBS is getting it for a bargain price, he said. Credit Suisse shareholders should be getting a premium for their shares, but they're not.
Despite these concerns, the merger is expected to go ahead as planned, and both banks are likely to benefit from the deal in the long run. However, Credit Suisse investors may be left feeling shortchanged, and it remains to be seen how the bank will respond to these concerns.