UBS’ takeover of Credit Suisse will probably cause little to no upheaval to the latter’s shipping clients — at least the Greek ones.
Four days after the two Swiss lenders announced a plan to merge, UBS said on Thursday that it intends to hold on to and expand its Greek wealth management activities — an area in which Credit Suisse has already made large inroads through its combined ship lending and wealth management operations.
“Our wealth management business in Greece is an integral part of our strategy in the region and one we are looking to grow, having recently announced a new market head to support those ambitions,” a UBS spokesman said in an email.
This comment, which UBS also sent to Reuters, came as a response to queries about an article in The Wall Street Journal on Wednesday, according to which UBS would probably shrink the $10bn shipping portfolio it inherited from Credit Suisse as part of its emergency takeover unveiled on 19 March.
As TradeWinds has already reported, $5.6bn of that portfolio is believed to be tied to top-notch Greek shipping clients who receive loans against deposits entrusted with Credit Suisse wealth managers.
That business strategy has made Credit Suisse the biggest lender to Greek shipping and the world’s 10th-largest ship lender overall, according to Petrofin Research.
UBS’ ship lending business, by contrast, has been negligible so far. The company disclosed exposure to “sea-based shipping” of merely $200m in its latest annual report.
TradeWinds has already reported that this makes the two banks highly complementary in this particular business.
Later comments by UBS management in a conference call with analysts confirm that view. Chief executive Ralph Hamers said that “what Credit Suisse brings is actually on the wealth side quite complementary” to UBS’ own strengths.
Credit Suisse is sending signals as well that it wants to stick to its Greek shipping business.
In an email sent to TradeWinds on 17 March — two days before its takeover by UBS was announced — Credit Suisse said it continued to regard maritime clients as a key component in its future strategy.
“Ship financing remains an integral part of our service offering and we remain committed to our shipping clients,” the Zurich-based lender said.
Asked on 23 March, after the announcement of its planned takeover by UBS, if that statement still applies, a Credit Suisse spokeswoman referred to a general statement made by the bank that its existing business will continue “in the ordinary course”.
The business-as-usual stance is confirmed by a manager in a major Greek shipping company that does business with Credit Suisse; he confirmed to TradeWinds that he remains in regular contact with the lender and that there was no sign of any ship lending wind-down, as suggested in The Wall Street Journal.
All the above, however, leaves open the question of whether UBS sees a future in a ship lending outside wealth management, whether in Greece or elsewhere.
Not much clarity is expected in this respect before details of the takeover and future business strategy emerge.
“It is too early to answer questions about single business lines,” the UBS spokesman said.
“We are at the beginning of a comprehensive integration planning process to help finalise the specifics of the future organisation.”
A closing of the Credit Suisse takeover is expected by the end of June, subject to expedited regulator approval.
The deal requires no shareholder approval to go through.
