The downgrade on UBS happened after Mediobanca said the resignation at the weekend of Oswald Grübel as UBS chief executive – with him being replaced by an interim CEO – was cause for concern about the Swiss firm’s future strategy and direction. (To view this publication’s own view on the affair and UBS, click here).  

In updating clients about the performance of a long-short portfolio that Mediobanca has in the financials space, the firm said the portfolio (Bloomberg ticker MBBVDDI) has outperformed the wider European banks sector (SX7P) by 63 percentage points since inception in June last year.

The portfolio holds long positions in HSBC, Credit Suisse, Julius Baer and Nordea, adding Credit Suisse in place of UBS, Mediobanca said in a note.

“We have kept to the rules of the shorting ban and have only names on the short side which were already initiated or are located in regions which allow shorting,” it said. The portfolio has short positions in BBVA, Credit Agricole, EFG International and UBS.