Swiss banking giant UBS said Monday its takeover of troubled rival Credit Suisse was complete. File photo by Hugo Philpott/UPI |
License PhotoJune 12 (UPI) — Swiss banking giant UBS announced Monday that with Credit Suisse fully merged into UBS, the process of taking over its troubled rival was complete and the pair would operate as a consolidated banking group from now on.
Credit Suisse Group shares will cease trading on the SIX Swiss Exchange at the close of business Monday as will its American Depository Receipts on the New York Stock Exchange, with shareholders receiving 1 UBS share for every 22.48 Credit Suisse shares held, UBS said in a news release.
The merger will see UBS Group oversee UBS and Credit Suisse as two separate parent banks each with its own subsidiaries and branches that will serve clients and transact with counterparties.
“I’m pleased that we’ve successfully closed this crucial transaction in less than three months, bringing together two global systemically important banks for the first time,” said UBS Group Chairman Colm Kelleher.
“We are now one Swiss global firm and, together, we are stronger. As we start to operate the consolidated banking group, we’ll continue to be guided by the best interests of all our stakeholders, including investors. Our top priority remains the same: to serve our clients with excellence.”
Welcoming new colleagues from Credit Suisse, UBS Group Sergio Ermotti said that instead of competing, the two banks were uniting to “embark on the next chapter of our joint journey,” pledging to together bring a stronger offering globally, a wider reach geographically and provide even greater expertise.
“We’ll create a bank that our clients, employees, investors and Switzerland can be proud of,” said Ermotti, a former UBS CEO who was tapped to head up the newly merged bank shortly after the deal was struck in March.
UBS will switch from Swiss francs to U.S. dollars for reporting consolidated financial results for the combined group under International Financial Reporting Standards with its first earnings report — for the April to June quarter — to be published on Aug. 31.
The bank expects its CET1 capital ratio — the size of a bank’s financial buffer against losses — to be around 14% in the second quarter of 2023 and to remain around that level throughout 2023.
Operating losses incurred by Credit Suisse and costs of restructuring will be counterbalanced by reducing the amount of risk-weighted assets held, UBS added.
The completion comes three days after the Swiss government made good on its pledge to underwrite UBS’ losses from the emergency takeover of its too-big-to-fail rival in March as a global banking crisis loomed.
The Federal Department of Finance and UBS signed a loss protection agreement Friday guaranteeing against potential losses from unwinding Credit Suisse’s assets to the tune of $10 billion. But the guarantee only kicks in if UBS’ losses exceed $5.55 billion.
