UBS intends to liquidate or sell most of Credit Suisse’s more complex and higher-risk structured loans in Asia Pacific.
Since closing the takeover in June, UBS has been scrutinising the approximately 75 billion Swiss franc book of loans made to rich clients globally. UBS has already said it plans to downsize Credit Suisse’s investment bank and put its bankers through a “culture filter” to weed out undesirable practices.
In scrutinising the loan book of the fast-growing Asian market, UBS chief executive officer Sergio Ermotti faces a dilemma — how to continue to build on UBS’ presence there while shielding the bank from hidden risks. The lender’s strategy still hinges on growth plans in the Asia Pacific region, alongside the US, one of the people said.
That set-up differed from Credit Suisse’s lending business to wealthy people in other parts of the world. In APAC, loans made to individuals and their businesses went hand-in-hand, and were more part of the same relationship with the bank than was common practice in other regions, people familiar said.