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Nestle to examine banking relationships following Credit Suisse downfall
Published Mar 28, 2023 04:40AM ET
Updated Mar 28, 2023 05:12AM ET
© Reuters. FILE PHOTO: A Swiss national flag flies beside a flag of the canton of Bern in front of the logo of Nestle at a plant in Konolfingen, Switzerland September 28, 2020. REUTERS/Arnd Wiegmann/F
ZURICH (Reuters) -Nestle will examine its banking relationships following the planned takeover of Credit Suisse by UBS, the food group's Chief Executive Mark Schneider said on Tuesday.
The world's largest food group was a client of Credit Suisse, Schneider told broadcaster TeleZueri in an interview to be shown on Tuesday evening, and had been following the collapse of Switzerland's second-biggest bank.
"We have worked closely with Credit Suisse for many decades in a spirit of trust," Schneider told the broadcaster.
"You can see from such an example that Switzerland as a business location and a financial centre are very closely linked. We now have to see how to reorganise our banking relationships, both with Swiss and international providers."
Schneider said the intervention by the Swiss government, the central bank and financial market regulator to engineer a merger with UBS had stabilised the situation and restored confidence.
Speaking about Nestle, Schneider said the company had made a good start to 2023, although further price rises by the company were likely, Schneider said, to offset inflation of raw material costs.
The maker of Nescafe instant coffee and KitKat chocolate bars raised prices by 8.2% last year, but that did not fully offset the impact of increased ingredient costs on margins.
Price increases had so far only had a "very limited" impact on consumer spending, Schneider said.
"As inflation continues, and then also affects our own profitability, we will have to adjust prices," Schneider said.
"We will continue to do this in a responsible way, we don't want to be a price driver. We respond to inflation, we don't fuel it," he said.
The food maker was also working on savings to reach its goal for a full-year underlying trading operating profit margin target of between 17% and 17.5% , Schneider added.
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