UBS Group AG is planning to exit billions of dollars in loans to Credit Suisse’s clients in the Asia Pacific region, as the Swiss bank works to neutralise risks to its profitability and reputation from the defunct lender.
The bank intends to either wind-down or sell off the majority of Credit Suisse’s more complex and higher-risk structured loans in APAC, people familiar with the matter said.
Those riskier assets will be placed in the so-called “Non-Core Unit” for businesses that UBS doesn’t want, the people said, who asked not to be named discussing private details. The bank is likely to keep less complicated loans made against liquid collateral – so-called Lombard loans.
Since closing the takeover in June, UBS has been scrutinizing the approximately CHF75 billion ($86 billion) book of loans made to rich clients globally. At its peak in 2019, more than CHF45 billion in loans to wealthy customers in its Asia Pacific unit were outstanding. UBS agreed to buy Credit Suisse in March in an emergency deal brokered by the government, after a confidence crisis and a torrent of client outflows sent it hurtling toward bankruptcy.