The takeover of Credit Suisse by the UBS Group in the first half of 2023 has surprised many observers. Perhaps you too have watched the inter-Swiss solution to the banking crisis 2.0 with some raised eyebrows.

First „too big to fail“, now „too big to bail“! Retrospectively: In the banking crisis 1.0, Commerzbank was considered so systemically relevant that the state took over a billion-dollar equity package. The institution was too big to be allowed to fail (“too big to fail”). In fact, there are also banks that have survived the crises fairly well, such as US bank JPMorgan Chase or Switzerland’s UBS Group. At the urging of the Swiss government, it accepted the ailing Credit Suisse and, in terms of market capitalization – currently 93 billion USD – overnight ascended to number 3 in Europe. In the long run, the question remains how large such banks can become and whether they will eventually become too big to be saved themselves (“too big to bail”).

Look at the fundamental KPIs of the UBS Group The figures have developed quite stably. Institutions that had to cope with larger payment defaults due to the Corona pandemic or had been involved in Eastern Europe before the outbreak of the Ukraine war are in a much worse position. The takeover of Credit Suisse then still comes as a surprise in terms of the business figures: UBS acquired the entire bank for 3 billion CHF, which is a fraction of its own equity. This led to a record profit of 29 billion USD in the second quarter due to the book gain from the transaction. In the same period last year, the surplus was only 2.1 billion USD. Without a doubt, the deal has special effects in the figures which cannot be estimated from today’s point of view. UBS itself writes on its website: “The decision to integrate the business of Credit Suisse (Switzerland) AG raises many questions which we cannot answer today.”

UBS Group Corporate Development; Source: aktienscreener.com

The picture is clearer in terms of chart techniques In the chart you can see a strong volatility around the banking crisis. But the low from March 20th is also the starting point of a new bull rally with a succession of lower lows and higher highs. For long trades, you could take advantage of the momentum of the last few days and use the lower of the two yellow lines as support.

UBS Group Stock (ISIN CH0244767585) – 1 year on daily chart; Source: aktienscreener.com

Conclusion Solid fundamental figures correspond to the rearview mirror, analyst forecasts to the crystal ball. Rather, use the signals of chart techniques for your decisions.