Execution will be key to a successful integration of two Swiss lenders after last month’s emergency rescue of troubled Credit Suisse Group AG by UBS Group AG, according to Philipp Hildebrand, vice chairman of BlackRock Inc.
(Bloomberg) — Execution will be key to a successful integration of two Swiss lenders after last month’s emergency rescue of troubled Credit Suisse Group AG by UBS Group AG, according to Philipp Hildebrand, vice chairman of BlackRock Inc.
“It will be a big execution story and I think it’s a culture story,” he said on a panel Thursday at the Bloomberg New Economy Gateway Europe event near Dublin.
The two have different cultures and that “it will be an intense and emotional national discussion” about having “a single very large bank in a country that always historically had several large banks,” he said.
UBS took over the smaller lender in a deal arranged by Swiss authorities after Credit Suisse suffered massive deposit outflows during a crisis of confidence.
UBS Chairman Colm Kelleher has said that it will likely take months to close the deal and as long as four years to complete the merger.
Kelleher is “extremely experienced” and will steer the strategy in an appropriate direction, Hildebrand said.
“It’s early days, there are various options,” he added.
Hildebrand, who’s been BlackRock’s vice chairman for more than a decade, took part in discussions when Swiss officials were putting together the UBS-Credit Suisse deal, Bloomberg has reported.
Hildebrand said he saw no scenario for interest-rate cuts this year but said core inflation and labor markets will remain tight.
With rising borrowing costs, he said further cracks will appear in the real economy, though it’s hard to predict where, other than the often-discussed commercial real estate.
“What we know is that we’ve not seen an increase in rates at this pace since the 1980s, so this is a new phenomenon,” he said.
Markets haven’t understood “how much we’re in a different regime” now, he added.
Talking about the banking sector, he said he doesn’t think Europe has a structural banking sector problem, and wasn’t worried about systemic risk.
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