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UBS almost there with Credit Suisse


The largest bank takeover since the financial crisis 15 years ago is about to be completed. In a few days, Credit Suisse should be merged into UBS. The transaction is controversial in Switzerland.

The almost 167-year history of Credit Suisse should be over in a few days. According to a joint statement with UBS, the emergency takeover of the major Swiss bank is to be completed on June 12. At this point, Credit Suisse will be merged into the larger UBS.

The execution is still subject to the approval of the US Securities and Exchange Commission (SEC). UBS itself must also consider the other closing conditions to be met or refrain from complying with them. According to the Bloomberg news agency, there was apparently still a need for discussion between the Swiss government and UBS in connection with the implicit state guarantee for the risks from the takeover.

With Sergio Ermotti, the Swiss UBS is bringing an experienced banking veteran back to its top management.

The merger will create a financial giant with over $5 trillion in assets under management and more than 120,000 employees. However, it shouldn’t stay that way. Experts expect that UBS will cut thousands of jobs in order to reduce duplicate structures and save.

emergency rescue in March

After numerous scandals and failures, Credit Suisse found itself in a crisis of confidence that threatened its very existence. When customers withdrew money on a large scale, the Swiss government organized an emergency takeover by the industry leader UBS in mid-March.

She wanted to prevent a major banking crisis from developing in a nervous market environment after the collapse of the American Silicon Valley Bank. In total, the Swiss National Bank and the government provided more than CHF 200 billion in liquidity support and guarantees.

A bank earthquake has been averted for the time being thanks to the rescue of Credit Suisse. But the merger carries risks.

Controversial transaction

The transaction is controversial in Switzerland. Only 15 years after supporting UBS, the state had to step in again. Now it is feared that a rescue of the new UBS, which will have a balance sheet that is around twice as large as the annual Swiss economic output, could exceed the country’s forces. In addition, the consequences for competition and the risk of permanent job losses are criticized.

To counteract this, a spin-off of the Credit Suisse business in the home market is being discussed. UBS CEO Sergio Ermotti wants to examine such a step and make a decision by the end of the summer.

On the other hand, UBS apparently plans to expand its Asian business after the takeover. According to a report by the Bloomberg news agency, the major bank is currently in talks with more than 100 Credit Suisse investment bankers in South Korea, Thailand, Vietnam and India in order to keep them in the group.