![]() The local unit is in many ways a miniature version of the group itself, with retail, private banking, corporate and investment bank functions. That points to the role of the bank’s historical predecessor, Schweizerische Kreditanstalt, founded by railway pioneer Alfred Escher in 1856 to finance the nation’s industrial expansion. Credit Suisse was the best in this field.”Ĭredit Suisse has been the leader in Swiss domestic investment banking activity in terms of deal value for at least a decade. “It’s not end of corporate finance in Switzerland but from perspective of competition, the idea of integrating Credit Suisse’s Swiss unit is not a very good one,” said Tobias Straumann, a professor of economic history at the University of Zurich. Read More: SNB’s Jordan Sees Credit Suisse Local Spinoff as ‘Off the Table’ And despite the focus by local politicians and investors on not handing one bank overwhelming power in the local market, there’s little push yet from regulators to keep the Swiss business independent. That makes the profitable Swiss unit a prized possession for UBS, with chairman Colm Kelleher saying during the announcement of the $3 billion deal on Sunday that he was determined to hang on to the unit. While smaller cantonal lenders and cooperative banks offer a counterbalance to UBS in retail banking and the Swiss mortgage market, Credit Suisse has long been the market leader in serving companies’ more complex needs. Saudi National Bank Chair Resigns After Credit Suisse Remarkįirst Citizens Nears Deal to Buy Silicon Valley Bank, Sources Sayįirst Citizens Buys Silicon Valley Bank After Run on Lenderīond Traders Go All-In on US Recession Bets That Defy Fed View As a result, financial markets forecast that the Bank of England’s cycle of base rate rises is near its peak – which would help dampen fears for the UK commercial property market.(Bloomberg) - UBS Group AG’s emergency buyout of Credit Suisse Group AG threatens to drastically shrink the financing options for small and mid-sized companies, after the demise of a 166-year-old champion of Swiss entrepreneurship. UK inflation unexpectedly rose to 10.4% in February but is expected to fall back later this year. “If inflation continues to rise, we’re going to end up with higher base rates and the chances of a crash increase materially.” ![]() Goonetilleke says the outlook for the UK commercial property market, like other business sectors, is closely linked to rising interest rates prompted by runaway inflation. The property group Savills, which reported a drop in annual profits this month, expects the sector to bounce back next year amid a lack of office development supply and a move towards sustainable buildings.Ĭommercial property prices in the UK could fall by a further 10% this year amid a “downward demand spiral”, Nuwan Goonetilleke, the head of shareholder assets at the savings and pensions group Phoenix Group, says. This could deepen the property downturn, and mean the recovery in UK commercial investment – which dipped by £1bn to £61bn in 2022 – will be slower than anticipated. Photograph: Alicia Canter/The Guardianīecause of rising interest rates, some owners of offices, shops and warehouses may be unable to refinance when existing loans mature, and could be forced to sell assets. Interest rate rises have fuelled fears about the outlook for the commercial property market. ![]() The Bank of England in the City of London. “That said, credit conditions are also set to tighten in the UK which will make refinancing more of a challenge, particularly for offices where capital values have fallen by 15% since 2018, against an 11% fall for all property,” Pointon says. As yet there have been no UK bank failures, and lenders’ exposure to real estate debt is relatively low at 6% of all debt, compared with more than 12% in the run-up to the 2008 financial crisis, he notes. The banking system in Britain is very different to the US, where a large share of property loans are advanced by small regional banks. “The UK commercial real estate (CRE) debt market seems to be in a better position than the US, where troubled regional banks were the main providers of finance,” Matthew Pointon, a senior property economist at Capital Economics, says. Goldman Sachs said in an analysts’ note earlier this month: “The recent stress in the banking sector has fuelled growing concern about spillover effects on the commercial real estate industry.” ![]() Several property funds, including the Blackstone Real Estate Income Trust, have been forced to limit withdrawals in recent months as investors head for the exit.
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