UBS’ Assets Hit $1.6 Trillion After Buying Credit Suisse
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According to foreign media reports, UBS said on the 12th that it has completed the acquisition of struggling rival Credit Suisse Bank. After the acquisition, UBS has become a “big mac” bank with a balance sheet of US$1.6 trillion.
UBS CEO Sergio Ermoti and Chairman Colm Kelleher published an open letter in the Swiss media, saying that the above-mentioned acquisition is “a new chapter for UBS, Credit Suisse and the global financial industry.” starting point”. The open letter stated that the above-mentioned acquisitions pose “challenges”, but at the same time provide “some opportunities” for customers, employees, shareholders and Switzerland.
Kelleher said in a statement released on the 12th that he was pleased to have successfully completed this pivotal transaction in less than three months, bringing together two global systemically important banks for the first time. “We are now a Swiss global company and together we will be stronger.”
El Moti said it will provide customers with better global products, wider geographic coverage and more professional services.
According to Reuters, the acquisition is the largest in the banking sector since the 2008 financial crisis. According to reports, after the acquisition of Credit Suisse, UBS will manage assets of 5 trillion US dollars and become the world’s largest wealth management institution.
The Swiss federal government used emergency powers on March 19 to push UBS to agree to acquire Credit Suisse for 3 billion Swiss francs (approximately 3.3 billion U.S. dollars) without the approval of shareholders, and the government will inject capital into the rescue to ensure the stability of the financial market. Safeguard Switzerland’s reputation as a global financial center.
The acquisition brings to a close the 167-year history of Credit Suisse. UBS said last week that it expected to complete the acquisition as early as the 12th, which would be the last trading day for Credit Suisse shares on the Swiss stock exchange. Credit Suisse will also no longer trade on the New York Stock Exchange.
Credit Suisse is Switzerland’s second-largest bank after UBS and is one of 30 global systemically important banks identified by global banking regulators. Credit Suisse has repeatedly exposed financial scandals and major investment mistakes in the past few years, which led to huge losses. After several regional banks in the United States closed down one after another in March, Credit Suisse became a weak link in the banking chain, its stock price plummeted, and customers quickly withdrew funds, triggering government intervention.
The Associated Press reported that it was a critical moment for the two Zurich-based rivals. The merger has raised fears that thousands of people could lose their jobs as a result, questions and lawsuits over the terms of the deal, and concerns about the impact of Switzerland’s creation of a “too big to fail” banking giant.
Although it took less than three months for UBS to acquire Credit Suisse, Ermoti said it would take three to five years for UBS to assimilate Credit Suisse. UBS has said it will substantially abolish Credit Suisse’s investment banking business. Ermoti acknowledged that “the next few months are going to be bumpy for sure”, but said the bank was very focused on getting the matter on the right track.
The Swiss Federal Government and UBS issued a statement on June 9 saying that the two parties had signed a “loss protection agreement” for the acquisition of Credit Suisse by UBS. Once UBS lost more than 5 billion Swiss francs due to this emergency acquisition, the Swiss government The excess will be covered, subject to a cap of 9 billion Swiss francs.
The emergency rescue plan faces political resistance ahead of parliamentary elections in October. Lawmakers have authorized an investigation into the plan and the events leading up to it. Credit Suisse investors have also sued Switzerland’s financial watchdog after about 16 billion Swiss francs of high-risk bonds were written down.
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