Will UBS be forced pay billions to make up for alleged sins in France? Is the stamp duty finally going to be abolished? And what about Raiffeisen? finews.com takes stock ahead of a new action-packed year.
1. A New Year of Stress
Residential investment properties have kept the central bank on its toes – with prices at a premium and mounting vacancy rates causes for concern. Finma, Switzerland's banking regulator, recently announced it would organize a stress test for some 20 mortgage lenders in Switzerland. They will reveal the true level of risk – expect the results early this year.
2. UBS Fighting on Several Fronts
Switzerland's No. 1 bank is saddled with two major and potentially expensive legal cases. In the tax dispute with France, a verdict by the Paris court is predicted for February – with potential fines measuring up to a whopping 5 billion euros ($5.7 billion). Observers expect UBS to appeal such a verdict.
In the U.S., UBS has opened a second front as it fights a civil complaint by the Department of Justice (DoJ) about the mortgage-backed securities business. The DoJ may demand as much as $2 billion to reach a settlement. The case may not be closed before the end of the year.
3. Exit From Brexit?
The Brexit chaos is getting out of hand: Prime Minister Theresa May has not many friends left to rely upon and fights an uphill battle to get parliamentary support for her much-maligned Brexit-deal. The exit from the union is timed for March 29, 2019. But nobody can say with certainty how it all will pan out – hard Brexit, negotiated Brexit, no Brexit at all – all options remain on the table.
Big global corporations such as UBS and Credit Suisse can't wait for the Brits to make up their minds though. They have started implementing relocation plans and have settled for new hubs on the continent – Frankfurt and Madrid are two top choices.
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