UBS discusses the sale of its Swiss unit of Credit Suisse

Considerations are at an early stage as UBS is focused on completing that acquisition and may not make a final decision on whether to pursue an IPO for months, another source said.

UBS and Credit Suisse declined to comment.

UBS is rushing to complete the bailout of state-backed Credit Suisse, which will create a banking giant that will oversee more than $5 trillion in invested assets.

The future of Credit Suisse’s business in Switzerland is being closely watched as one of UBS’s key strategic decisions. A combination with UBS would create a dominant position in the Swiss lending market, according to Jefferies analysts.

The merger has raised concerns among lawmakers that it could reduce competition.

Credit Suisse’s Swiss banking is one of the lender’s four operating units and is considered the jewel in the crown. In 2022, the unit had a pre-tax profit of $1.7 billion.

The elimination of its investment banking operations would mean reversing a measure adopted just a few months ago. In January, Credit Suisse had moved business from its broader investment banking division to the Swiss unit, according to Credit Suisse’s 2022 annual report.