The Swiss government strongarmed UBS into buying its rival for $3.25 billion after the collapse of three US lenders in March raised concerns about Credit Suisse’s own financial health, following a series of scandals in recent years.

But little has been said about the most robust part of the sprawling bank – its domestic retail banking division, responsible for mortgage loans and financing for Swiss companies.

Credit Suisse’s heavy losses were mostly due to the international wealth management and banking divisions.

The Swiss division’s turnover only fell by five percent last year – whereas turnover in international wealth management slid by nearly a third, and the investment bank tumbled 54 percent.

Investors are becoming impatient with the scattered details around the complex integration.

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UBS insisted this week that “all options” would be considered for the Swiss activities of the bank, promising to share more details in the coming months.

UBS now ‘too big’

But investors are anxious to know whether UBS will integrate the Swiss banking division into its own domestic business, sell it, or even split it through a share offering.

“One of the reasons that supports the idea of a spin-off is probably the fact that UBS has gotten too big after swallowing Credit Suisse for the Swiss market,” said Ipek Ozkardeskaya of Swissquote.

“Another could be to maximize the Swiss branch potential and to offer Swiss clients an alternative to UBS.”

Keeping it as an independent unit appeals to many in Switzerland – particularly as it could prevent mass layoffs in the important banking sector.

Together, the two banks employ 120,000 people worldwide, including 37,000 in Switzerland.

“Full integration means that UBS would have to take a lot of costs and fire a lot of people at Credit Suisse,” said Andreas Venditti, analyst at asset manager Vontobel.

Credit Suisse itself had considered a partial IPO of its Swiss branch in
2016.

“We are still in favour of splitting off the Swiss branch,” the Foundation Ethos, which represents pension funds in Switzerland, told AFP.

Ethos said this was the best option not only to protect jobs, but to avoid concentrating risks in one giant bank.

Venditti says that UBS could “carve out Credit Suisse Switzerland’s front office only… (the brand) would survive and the two banks would compete.”

“If in a few years’ time the situation has stabilised then it would be a good time to bring this new smaller Credit Suisse to the market,” he said.

J.P. Morgan analysts said splitting it off as an independent arm could create a division valued at a minimum of $10 billion for UBS.

“We know that a spin-off could unlock value,” said Ozkardeskaya.

And it could also help calm jittering investors about the threat of “a giant that became even more giant after the merger”, she said.