Swiss Stocks Fall; UBS, Credit Suisse Retreat, Clariant Advances

Swiss stocks fell as European banks declined after officials agreed to review the terms of Greece’s bailout, reigniting concern that the country will fail to repay at least some of its debt.

UBS AG (UBSN), Switzerland’s largest bank, slumped 1.9 percent after the Financial Times reported that the lender may fail to meet performance targets that it set in 2009. Credit Suisse Group AG declined 1.4 percent as a gauge of European banking shares tumbled 1.3 percent, among the biggest retreats of the 19 industry groups in the Stoxx Europe 600 Index.

The Swiss Market Index (SMI) of the biggest and most actively traded companies slid 0.8 percent to 6,476.89 at the 5:30 p.m. close in Zurich. The broader Swiss Performance Index (SPI) lost 0.6 percent to 5,979.96.

“It’s really the larger banks in Switzerland that are suffering today from sentiment across Europe,” said Andreas Venditti, an analyst at Zuercher Kantonalbank in Zurich. “Sovereign-debt concerns are amongst the reasons.”

The European Union agreed in an unannounced meeting on May 6 to ease the terms of the 110 billion-euro ($157 billion) lifeline Greece received last year. The gathering followed a report in Der Spiegel magazine that Greece may withdraw from the euro. EU officials denied the report and said that the country will require further aid after investors drove yields on its two-year notes to more than 25 percent.

Swiss stocks consolidated their losses after Standard & Poor’s lowered Greece’s long-term sovereign-credit rating to B from BB-.

UBS, Credit Suisse

UBS sank 1.9 percent to 16.70 Swiss francs. The bank will probably fail to meet the performance targets it set in 2009, the Financial Times reported, citing unnamed senior UBS bankers. UBS set the goals before international regulators completed the Basel III framework. Switzerland subsequently put forward additional capital requirements for its banks.

UBS has no immediate plans to change its medium-term growth targets for 20 billion francs ($22.9 billion) in annual sales and 6 billion francs in pretax profits at its investment bank, the FT said.

Credit Suisse Group AG (CSGN), the nation’s second-largest bank, declined 1.4 percent to 36.99 francs.

Julius Baer Group Ltd. (BAER), the 121-year-old wealth manager, retreated 1.7 percent to 38.69 francs.

Clariant AG (CLN), the maker of chemicals and paints, jumped 2.5 percent to 18.66 francs after Deutsche Bank AG raised its rating to “hold” from “sell.”

“Clariant is well on track to generate significant economic value for the first time in 10 years,” Patrick Rafaisz, an analyst at Vontobel Holding AG in Zurich, wrote in a note to clients. “We expect momentum to pick up again.”

Santhera Pharmaceuticals Holding AG surged 7.1 percent to 7.70 francs after saying a study showed that its Catena treatment may slow the decline in respiratory function in ageing patients.

To contact the reporters on this story: Giles Broom in Zurich at gbroom@bloomberg.net; Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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