American Express To Become Sole Owner Of Swisscard As UBS Sells Its 50% Stake

American Express Company AXP is poised to become the sole owner of Swisscard after UBS Group AG UBS announced plans to sell its 50% stake. This comes just days after American Express reported mixed third-quarter results, with revenue slightly below analyst expectations.

What Happened: UBS is divesting its half-share in Swisscard to American Express, as per Reuters on Monday. This decision aligns with UBS’s strategic shift following its acquisition of Credit Suisse. The deal’s financial terms have not been disclosed, but Swisscard has reportedly confirmed the transaction.

This sale is part of UBS’s broader strategy to streamline its operations after the emergency takeover of Credit Suisse. UBS has stated that issuing cards through Swisscard no longer fits its strategic goals, and Credit Suisse customers will be moved to UBS’s existing credit card platform.

Swisscard has reassured stakeholders that the change in ownership will not immediately impact cardholders, merchants, or partners. The company will continue to issue cards under American Express, Mastercard, and Visa licenses in Switzerland.

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UBS has been actively restructuring, having sold a stake in Credit Suisse Securities (China) in June and a former insurance-linked investment unit in July. The bank plans to inform Credit Suisse cardholders about new card issuance by mid-2025.

Why It Matters: The decision by UBS to sell its stake in Swisscard comes amid a series of strategic divestments following its acquisition of Credit Suisse. In August, UBS liquidated a $2 billion real estate fund from Credit Suisse, reflecting a broader effort to streamline its portfolio. The fund, known as the Credit Suisse Real Estate Fund International, had seen a significant decline in value throughout 2023.

Meanwhile, despite American Express’ mixed results in the third quarter, there were positive signs in expense management and net interest income growth, suggesting potential for future performance improvements.

Price Action: On Friday, American Express closed 3.15% lower at $276.79 while UBS closed at $32.83, marking a 0.83% hike from its previous close, as per Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari