UBS completes acquisition of Credit Suisse to become wealth management giant – 06/12/2023 – Market

UBS said on Monday it had completed an emergency takeover of local rival Credit Suisse, creating a giant Swiss bank with a balance sheet of $1.6 trillion and greater wealth management power.

In announcing the biggest banking deal since the 2008 global financial crisis, UBS Chief Executive Sergio Ermotti and Chairman Colm Kelleher said it will create challenges but also “many opportunities” for customers, employees, shareholders and the Switzerland.

“This is the beginning of a new chapter — for UBS, which calls itself the world’s greatest wealth manager, for Switzerland as a financial center and for the global financial sector,” they said in an open letter published in Swiss newspapers.

They have no doubt that they will be able to handle the acquisition successfully, the letter added.

The group will manage $5 trillion in assets, giving UBS a leadership position in key markets that would otherwise need years to grow in size and reach. The merger also ends Credit Suisse’s 167-year history, marred in recent years by scandals and losses.

The two banks together employ 120,000 people worldwide, although UBS has already said it will cut jobs to cut costs and take advantage of synergies.

UBS agreed on March 19 to buy the lender for a paltry 3 billion Swiss francs ($3.32 billion) and up to 5 billion francs in presumed losses, in a bailout orchestrated by Swiss authorities.

On Friday (9), UBS reached an agreement with the Swiss government on the conditions of public support of 9 billion Swiss francs (10 billion dollars) for losses arising from the liquidation of parts of Credit Suisse’s businesses.

UBS closed the deal in less than three months – a tight schedule due to its scale and complexity – to provide greater security for Credit Suisse customers and employees and prevent exits.

Both UBS and the Swiss government have offered assurances that the acquisition will reward shareholders and not become a burden on the taxpayer. They say the bailout was also necessary to protect Switzerland’s position as a financial center, which would suffer if the collapse of Credit Suisse triggered a broader banking crisis.