UBS Group, Switzerland’s largest financial institution, introduced on Sunday (19) that it has agreed to purchase Credit Suisse for US$3.24 billion. The mixed corporations will handle greater than US$1.5 trillion in invested property.
UBS indicated that it plans to cut back the variety of workers at Credit Suisse, which has about 1,000 workers in Brazil and 50,000 worldwide however didn’t specify the dimensions of the minimize.
UBS President Colm Kellenher mentioned the brand new interval could be “difficult for employees” at Credit Suisse.
“We will try to make this period of uncertainty as short as possible,” he mentioned at a press convention with members of the Swiss authorities.
Kellenher assured that after this operation, his financial institution will stay “solid as a rock” and that his technique on this new stage shall be to “increase our capital.”
Among the small print he provided, Kellenher mentioned he would cut back the dimensions of Credit Suisse’s funding banking unit, which has given essentially the most hassle in recent times and has been concerned in a number of scandals which have tarnished its popularity.
This funding banking “will represent no more than 25% of the bank’s assets,” he mentioned.
The UBS president additionally indicated that Credit Suisse First Boston, the financial institution’s funding financial institution integrated within the United States, will proceed to function.
“We are committed to making this transaction a great success,” the chief mentioned.
In a press release posted on its web site, UBS mentioned that “the acquisition will further strengthen UBS’ position as the leading Swiss wealth manager, with more than US$3.4 trillion in combined invested assets, operating in the most attractive growth markets.”
Kelleher referred to as the Credit Suisse buy an “emergency rescue.”
“This acquisition is attractive to UBS shareholders, but let’s be clear, as far as Credit Suisse is concerned, this is an emergency rescue.”
“We have structured a transaction to preserve the amount spent on the deal, limiting our negative exposure.”
“The acquisition of Credit Suisse’s capabilities in wealth management, asset management, and Swiss universal banking services will enhance UBS’s strategy of expanding its capital-light business.”
MOST SIGNIFICANT BANK MERGER SINCE THE FINANCIAL CRISIS
The merger choice was preceded by days of marathon negotiations involving the events concerned within the two banks and high representatives of politics and supervisory authorities.
In the method, UBS and Credit Suisse had been urged by politicians and regulators to merge.
The Swiss Federal Council additionally held a number of conferences over the weekend on the Credit Suisse state of affairs.
UBS’s takeover of Credit Suisse is Europe’s most vital financial institution merger for the reason that monetary disaster 15 years in the past.
It will create one among Europe’s largest systemically essential monetary establishments – bigger than Deutsche Bank.
Credit Suisse is likely one of the world’s largest asset managers and is likely one of the 30 international systemically essential banks whose failure would shake the worldwide monetary system.
“The takeover of Credit Suisse by UBS has provided a solution in this extraordinary situation to safeguard financial stability and protect the Swiss economy,” it mentioned.