The recent acquisition of Credit Suisse by UBS carries operational risks for Swiss pension funds that will likely face losses for their investments even if only a small share of their assets is invested in Credit Suisse holdings.

“We see immediate consequences for pension funds that hold Credit Suisse shares or, for example, CoCo Bonds. It is highly likely that these pension funds will suffer losses,” Heinz Rothacher, chief executive officer at consultancy Complementa, told IPE.

In the medium term, consultancy PPCmetrics sees certain operational risks for pension funds, such as cumulative counterparty risk.

“The main risk here potentially is an operational risk. The next few months will be very challenging for the employees and, as always with such transactions, there is a ‘key people risk’,” Stephan Skaanes, partner at the Swiss consultancy, told IPE.

Stephan Skaanes at PPCmetrics

Heinz Rothacher at Complementa

In a report detailing the consequences of the transaction for investors, published this week by PPCmetrics, the firm underlined that Credit Suisse is one of the most important asset managers for institutional investors in Switzerland.

Therefore it is recommending investors that opted for financial products or mandates with Credit the firm to monitor the turnover in its asset management teams. Diversification across different asset managers shrinks for investors with mandates placed with Credit Suisse and UBS, and operational risk cumulates, it added in the report.

In the long term, the challenge for Swiss pension funds is that competition, for example in global custody but also in terms of selection of institutional investment products, will be limited following the takeover, Skaanes added.

The Pensionskassen have voiced their concerns about a lack of competition at best, and a monopoly at worse, emerging in the banking sector as the consequence of the country’s largest lender UBS buying rival Credit Suisse.

“There will be less choice of providers, which is unfortunate […] In order to be meaningfully diversified again [the Pensionskassen] will have to look for other providers,” Rothacher said.

Credit Suisse plays an important role as custodian bank or global custodian in Switzerland, therefore it is worth for investors to look at the architecture of the new bank, as the custodian business requires significant investments in software and systems that can change over time, PPCmetrics’ report added.


The Swiss government, the financial market supervisory authority FINMA, and the Swiss National Bank (SNB) have exercised all their powers and pressure to force the merger between UBS and Credit Suisse, protecting global financial stability.

Indirectly, according to PPCmetrics, the interest that the government, SNB and FINMA have in a successful takeover offers a form of protection, reducing the immediate risks for Swiss pension funds.

Moreover, on average pension funds in Switzerland only hold around 0.1-0.5% of Credit Suisse’s share of total assets, according to the consultancy.

Heinz Rothacher at Complementa

Stephan Skaanes at PPCmetrics

The country’s largest pension fund, Publica, started to reduce its exposure to Credit Suisse at the beginning of 2022, and since November last year its direct financial loss from holding Credit Suisse shares amounted to 0.006% of its total assets, equaling to CHF2.5m.

Publica has also set out an internal risk process to reduce the volume of its securities lending programme held with Credit Suisse, from CHF85m to almost zero in November last year, closing its cash account held at the bank.

For Publica as an institutional investor, the takeover of Credit Suisse by UBS will likely reduce the options of Swiss financial service providers in the medium term, but from today’s perspective, the operational risks are low, it said in a statement.

“Very few pension funds actively trade Credit Suisse shares. Most pension funds hold Credit Suisse or UBS shares in the approximate weighting on the Swiss stock and bond market, inclined to act with a steady hand [thus] I do not assume that they will actively buy or sell the shares,” Skaanes said.

According to Rothacher, holdings of Swiss bank stocks have not been rewarding for investors in recent years, and the question is whether this has changed now.

“Probably not. This is an investment decision that must be carefully considered and fit into the overall investment strategy. Panic is not a good advisor,” he said.

The latest digital edition of IPE’s magazine is now available