The two Zurich-based neighbours have for decades gone head-to-head in competition. AFP
The two Zurich-based neighbours have for decades gone head-to-head in competition. AFP
The two Zurich-based neighbours have for decades gone head-to-head in competition. AFP
The two Zurich-based neighbours have for decades gone head-to-head in competition. AFP

Business

Banking

UBS considering post-merger sale of Swiss banking unit of Credit Suisse

Swiss banking operation is seen as the jewel in the crown

Reuters

May 05, 2023

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  • Arabic

UBS is reviewing options for Credit Suisse's Swiss bank, including the possibility of keeping the unit's investment banking operations while selling the rest, according to two sources.

It is studying plans to sell the Swiss banking business of Credit Suisse in an initial public offering after taking over its smaller rival, sources said.

The considerations are at an early stage as UBS is focused on completing the takeover and it may not make a final decision on whether to pursue an IPO for months, another source said.

UBS and Credit Suisse declined to comment.

UBS is racing to complete the state-backed rescue takeover of Credit Suisse that will create a banking giant overseeing more than $5 trillion in total invested assets.

The future of Credit Suisse's business in Switzerland is being closely watched as one of UBS's key strategic decisions. A combination with UBS would create a dominant position in the Swiss loan market, according to analysts at Jefferies. Some politicians are concerned that the merger could lead to reduced competition.

Credit Suisse's Swiss bank is one of the lender's four operating units and is seen as the jewel in the crown. The unit reported pre-tax income of 1.5 billion Swiss francs ($1.7 billion) in 2022.

Stripping out its investment banking operations would reverse a move from just a few months ago. In January, Credit Suisse had moved the business from its broader investment banking division into the Swiss unit, according to Credit Suisse's 2022 annual report.

The two Zurich-based neighbours have for decades competed head-to-head for mergers and share sales across the world. UBS, which has lagged behind Credit Suisse in deal-making and share sale rankings, looks to bolster its investment banking business.

On Wednesday, UBS chief executive Sergio Ermotti said that his bank was working on closing its merger with Credit Suisse by the end of May or early June. Regarding a possible sale, Mr Ermotti has said all options for the Swiss business are on the table.

On Sunday, NZZ am Sonntag newspaper reported that UBS was working towards spinning off Credit Suisse's domestic unit. The Swiss newspaper cited a source as saying that UBS had come around to the idea of a spin-off, which it initially ruled out, because of growing public and political pressure.

Killing of Qassem Suleimani
The drill

Recharge as needed, says Mat Dryden: “We try to make it a rule that every two to three months, even if it’s for four days, we get away, get some time together, recharge, refresh.” The couple take an hour a day to check into their businesses and that’s it.

Stick to the schedule, says Mike Addo: “We have an entire wall known as ‘The Lab,’ covered with colour-coded Post-it notes dedicated to our joint weekly planner, content board, marketing strategy, trends, ideas and upcoming meetings.”

Be a team, suggests Addo: “When training together, you have to trust in each other’s abilities. Otherwise working out together very quickly becomes one person training the other.”

Pull your weight, says Thuymi Do: “To do what we do, there definitely can be no lazy member of the team.” 

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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The specs
Engine: 2.4-litre 4-cylinder

Transmission: CVT auto

Power: 181bhp

Torque: 244Nm

Price: Dh122,900 

Updated: May 05, 2023, 8:11 AM
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