Fitch cuts UBS, ups Credit Suisse

Fitch Ratings said it downgraded the long-term issuer default ratings of UBS Group AG to A from A+ and of UBS AG to A+ from AA-. Fitch also upgraded Credit Suisse AG's long-term IDR to A+ from BBB+. The outlooks are stable.

The agency also removed UBS Group AG and UBS AG's long-term IDRs from rating watch negative, and Credit Suisse AG's from rating watch evolving, where they were placed on March 21, after UBS announced, it had agreed to acquire Credit Suisse.

The rating actions follow UBS completing its acquisition Credit Suisse, Fitch said.

“We expect the integration to initially weigh on the enlarged group's operating profitability, as UBS will need to stabilize Credit Suisse's severely impaired revenue generation capacity, while rapidly aligning its cost base with its future earnings potential and completing the wind-down of non-core activities initiated by Credit Suisse, especially in its investment bank. Given the complexity of both organizations, we expect this challenging integration to take several years,” Fitch said in a press release.

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