The two big Swiss banks Credit Suisse and UBS want to be perceived differently by investors than their competitors in the banking sector. They have now achieved that. According to a stock market index, they are no longer considered a bank.
UBS and Credit Suisse (CS) are no longer banks. The index company FTSE Russell has reclassified the two largest Swiss banks. Accordingly, UBS is now an asset manager and CS is a specialty finance company. CS only gets 27 percent of its banking revenue, while UBS derives over 50 percent of its income from wealth management, according to FTSE Russell.
The result: UBS and CS fly out of the Stoxx Europe 600 Banks Index. According to the Stoxx index company, the two are the only major financial institutions in Europe that will not be included in the banking index. Instead, UBS and CS are included in the Stoxx Europe 600 Financial Services Index. Neither Swiss bank commented on this.
No longer included in ETF
The reclassification, effective June 22, will impact investors. Those who follow the bank benchmark will no longer find UBS and CS in it. The two Swiss bank shares are no longer included in the corresponding ETF products.
It remains to be seen how this will affect the share performance of the two. Namely UBS CEO Sergio Ermotti had repeatedly complained that investors would not pay enough attention to the wealth management business model and that UBS would be lumped together with the structurally weak European banks.
What impact does the corona crisis have on the financial sector?
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Business is picking up again and financial houses will create new jobs.
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Many financial institutions will calculate more carefully and will only create new jobs to a limited extent.
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Most financial institutions will cut up to 20 percent of their jobs.
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There will be a clear cut – digitization will destroy up to 40 percent of jobs.
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