UBS completes acquisition of Credit Suisse in deal to stem global financial turmoil

BERLIN (AP) — UBS said on Monday it had completed its takeover of embattled rival Credit Suisse, nearly three months after the Swiss government rushed to strike a bailout deal to combine the country’s two biggest banks. in order to preserve Switzerland’s reputation as a global bank. center and quell market turbulence.

According to a statement from the bank, “UBS today completed the acquisition of Credit Suisse, achieving an important milestone.”

UBS had said last week that it expected to complete the acquisition worth 3 billion Swiss francs ($3.3 billion) as early as Monday – which will be the last trading day for Credit Suisse shares on the stock market. Swiss stock exchange. Credit Suisse will also no longer be listed on the New York Stock Exchange.

It’s a pivotal moment for the two Zurich-based rivals, whose combination has raised concerns over thousands of expected job losses, drawn blame and lawsuits over the terms of the deal, and sparked fears about the impact of creating a Swiss megabank that would be too big to fail.

“This is a very important moment – not just for UBS, (but) for Switzerland as a financial center and for Switzerland as a country,” UBS CEO Sergio Ermotti said on Friday. “So we feel responsible, but we are fully motivated.”

Ermotti, who returned to UBS to push through the deal, acknowledged that “the coming months will definitely be bumpy,” but said the bank was “very focused on getting it right.”

The Swiss government orchestrated the bailout of Credit Suisse over a weekend in March after the lender’s shares plunged and customers quickly withdrew their money, fearing its collapse could further disrupt global financial markets in the wake of the failure of two American banks.

“I am delighted that we have successfully completed this crucial transaction in less than three months, bringing together two global systemically important banks for the first time,” UBS Chairman Colm Kelleher said in a statement released Monday. “We are now a global Swiss company and together we are stronger.”

Ermotti said “we will present our clients with an enhanced global offering, wider geographic reach and access to even greater expertise.”

UBS Group AG will manage two separate parent banks, UBS and Credit Suisse, each retaining its own branches and clients.

The 167-year-old Credit Suisse has had a series of scandals over the years that have touched the heart of its business, from bad bets on hedge funds to a failure to prevent money laundering by a Bulgarian cocaine ring and charges he did not report. secret offshore accounts that wealthy Americans used to avoid paying US taxes.

UBS will inherit the ongoing cases against Credit Suisse and the resulting financial repercussions, including a recent ruling in Singapore that Credit Suisse owes former Georgian Prime Minister Bidzina Ivanishvili hundreds of millions of dollars for failing to protecting the billionaire’s money in a trust stolen by a director.

Credit Suisse is appealing this and a similar case in Bermuda, where Ivanishvili claims a bank subsidiary failed to prevent the “fraudulent mismanagement” of its assets in two life insurance policies. .

The Swiss government has agreed to provide UBS with 9 billion Swiss francs (nearly $10 billion) in guarantees to cover any losses it may suffer from the takeover after UBS covered any hit until to 5 billion francs (5.5 billion dollars).

This emergency rescue plan faces a political setback ahead of the October legislative elections. Switzerland’s lower house reprimanded him in a token vote, and lawmakers approved the establishment of an investigation into the deal and the events leading up to it. The Swiss Attorney General’s office has already opened an investigation.

Credit Suisse investors have also sued the country’s financial regulators after the cancellation of about 16 billion Swiss francs ($17.7 billion) of junk bonds.

The US Federal Reserve, the executive branch of the European Union and others around the world approved the takeover. Credit Suisse was listed as one of the 30 globally important banks because its collapse posed a broader risk to the financial system.


Bonnell reported from London.

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