UBS: Twisting in the Wind

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Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at

After the takeover of Credit Suisse following its near collapse in 2023, historic fellow Swiss bank UBS now possesses assets that are 2.5 times1 that of its homeland Switzerland’s Gross Domestic Product (GDP). Given its new size and increased access to clients through Credit Suisse’s network, it’s entirely logical to assume that this will prove to be a boost to the company’s stock.

Shortly after the takeover was approved by regulators and announced on the 19th of March 2023, the company’s stock steadily extended gains over both the meandering Nasdaq Financial-100 index (IXF) as well as the broad market S&P 500. Since January of last year till the present, the company has accrued substantial outperformance relative to both indices.

Source: Leverage Shares

However, the bank also inherited Credit Suisse’s liabilities as well. As of its last released quarterly update (dated as of end of September 2023), the company’s total revenues for the year are nearly matched by the goodwill impairment from the acquisition.

Source: UBS Financial Statements

While revenues did see a 12% growth in year-on-year (YoY) terms, operating expenses and personnel count witnessed a 45% and 61% growth respectively. In terms of tangible book value of the stock, however, it has witnessed a nearly 50% growth after the acquisition. However, to stave off continuing high costs, it has its work cut out. With regard to risky assets, UBS has been hard at work with some decidedly uncertain outcomes. A plan to liquidate its $250 million distressed-debt business failed last year2. The bank is now attempting to sell off these assets individually.

Personnel count is a key concern for investment banks: good talent traditionally is hard to find, almost never cheap and accounts for a massive chunk of expenses. However, given that both UBS and Credit Suisse often competed in the same markets, there are bound to be post-acquisition redundancies. It’s looking to terminate thousands of roles inherited as a result of the acquisition, from the managing director level down3. The layoffs would be driven by cost-cutting considerations as opposed to on the basis of performance. Meanwhile, it’s struggling to offload the investment banking franchise it inherited from Credit Suisse in China, given geopolitical risks and a tough growth outlook forecasted in China’s economy. UBS’ offloading effort (find a buyer) is likely going to be complicated by the fact that nearly all prominent banks are cutting personnel in China and engaged in cost-cutting exercises around the world.

One of the reasons why financial services stocks have traditionally been favoured when recessionary outlook is grim is because high rates tend to translate to higher revenues and increased demand for fixed-income products – a forte for investment banks. Another factor that favours banks is that they have traditionally never been shy about engaging in resolute cost-cutting programs. In effect, they tend to attain cost efficiencies quite rapidly, thus creating substantial tailwinds for investor preference.

The headwind for UBS, however, has been that its explosive capture of market share via the collapse of Credit Suisse has come with costs it’s currently struggling to rationalize. Until the publication of its fourth quarter 2023 results on the 6th of February, the stock can be expected to be volatile. For professional investors, there’s ample potential to consider rapid tactical trading opportunities via UBS3 – which provides a daily-rebalanced 3X exposure to the upside of the stock – or UB3S, which does the same on the downside. Over the course of the next week or so, a combination of these two ETPs might prove to have some interesting payoff potential.


  1. “After Credit Suisse, what next for UBS, Switzerland, and the Swiss Financial Centre?”, 6 December 2023, International Institute for Management Development (IMD), Lausanne
  2. “UBS to Sell Credit Suisse Distressed Debt Assets Individually”, 18 January 2024, Bloomberg News
  3. “UBS rolls out fresh layoffs as Credit Suisse integration continues”, 18 January 2024, Financial News London
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

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Sandeep Rao


Sandeep joined Leverage Shares in September 2020. He leads research on existing and new product lines, asset classes, and strategies, with special emphasis on analysis of recent events and developments.

Sandeep has longstanding experience with financial markets. Starting with a Chicago-based hedge fund as a financial engineer, his career has spanned a variety of domains and organizations over a course of 8 years – from Barclays Capital’s Prime Services Division to (most recently) Nasdaq’s Index Research Team.

Sandeep holds an M.S. in Finance as well as an MBA from Illinois Institute of Technology Chicago.

Violeta Todorova

Senior Research

Violeta joined Leverage Shares in September 2022. She is responsible for conducting technical analysis, macro and equity research, providing valuable insights to help shape investment strategies for clients.

Prior to joining LS, Violeta worked at several high-profile investment firms in Australia, such as Tollhurst and Morgans Financial where she spent the past 12 years of her career.

Violeta is a certified market technician from the Australian Technical Analysts Association and holds a Post Graduate Diploma of Applied Finance and Investment from Kaplan Professional (FINSIA), Australia, where she was a lecturer for a number of years.

Julian Manoilov

Marketing Lead

Julian joined Leverage Shares in 2018 as part of the company’s primary expansion in Eastern Europe. He is responsible for web content and raising brand awareness.

Julian has been academically involved with economics, psychology, sociology, European politics & linguistics. He has experience in business development and marketing through business ventures of his own.

For Julian, Leverage Shares is an innovator in the field of finance & fintech, and he always looks forward with excitement to share the next big news with investors in the UK & Europe.

Oktay Kavrak

Head of Communications and Strategy

Oktay joined Leverage Shares in late 2019. He is responsible for driving business growth by maintaining key relationships and developing sales activity across English-speaking markets.

He joined Leverage Shares from UniCredit, where he was a corporate relationship manager for multinationals. His previous experience is in corporate finance and fund administration at firms like IBM Bulgaria and DeGiro / FundShare.

Oktay holds a BA in Finance & Accounting and a post-graduate certificate in Entrepreneurship from Babson College. He is also a CFA charterholder.

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