MADRID, 12 Jun. (EUROPA PRESS) -
The Swiss bank UBS has completed the acquisition of what was its great rival, Credit Suisse, thus putting an end to almost three months of uncertainty since on March 19, with the intervention of the Swiss authorities, the parties agreed to the largest bank merger in Europe since the financial crisis.
The completion of the transaction, announced in an open letter published in Swiss and international media, ends Credit Suisse's 167-year history and gives rise to a new banking giant.
"This is the beginning of a new chapter for UBS and for the global financial industry," said UBS Chairman Colm Kelleher and the bank's CEO Sergio Ermotti in the open letter to the press announcing the closure law of the operation.
"We will combine the skills, scale and leadership in wealth management of UBS and Credit Suisse to create an even stronger integrated financial institution (...) We know that we will face challenges. But we also know that great opportunities will present themselves," they add.
As agreed, Credit Suisse shareholders have received one UBS share for every 22.48 shares held. The rescue agreement agreed on March 19 raised the amount of the operation to more than 3,000 million Swiss francs (3,090 million euros).
Following the close of the merger, Credit Suisse's shares will leave their place on the Zurich Stock Exchange's selective Swiss Market Index (SMI) to those of the Swiss logistics and transport group Kuehne Nagel, which will start trading on the index from of June 13.
On the other hand, UBS has indicated that it expects its CET1 core capital ratio to be around 14% in the second quarter of 2023 and to remain at that level throughout 2023 and has anticipated that it is confident that Credit's operating losses Suisse and significant restructuring charges will be offset by reductions in risk-weighted assets (RWA).
In addition, UBS has confirmed that it will publish the consolidated financial results of the combined group for the second quarter of 2023 on August 31, 2023.
"I am pleased that we have successfully closed this crucial transaction in less than three months, bringing together two global systemically important banks for the first time," said Colm Kelleher, Chairman of UBS. "We are now a global Swiss company and together we are stronger," he added.
"Instead of competing, we will now come together as we embark on the next chapter of our joint journey," added Sergio Ermotti.
Last Friday, the Government of Switzerland and UBS signed an agreement whereby the public coffers will cover up to 9,000 million Swiss francs (9,256 million euros) in possible losses of a portfolio of Credit Suisse assets once the acquisition is completed.
Specifically, the public guarantee will take effect "only if the losses derived from the realization of these assets exceed 5,000 million Swiss francs (5,142 million euros)" and will be limited to a maximum of 9,000 million francs.
Thus, UBS will bear the impact of the first 5 billion Swiss francs of potential realized losses on a designated portfolio of Credit Suisse non-core assets, equivalent to approximately 3% of the combined assets of the merged bank and comprising primarily loans, derivatives, legacy assets and structured products from Credit Suisse's non-core unit.
The European Commission approved on May 25 without conditions the merger between the Swiss financial institutions UBS and Credit Suisse, just over two months after the collapse of the latter, after verifying that the operation will not raise competition problems in the European Economic Area (EEE).
As UBS explained in early May, once the legal closing of the Credit Suisse acquisition is complete, Credit Suisse will merge with UBS Group AG (UBS) and the combined entity will operate as a consolidated banking group, although UBS AG and Credit Suisse AG will continue to operate. operating independently for the foreseeable future and UBS will carry out an integration in stages.
Thus, at the time of legal closing, a governance is contemplated whereby UBS Group AG will initially manage the two separate parent companies: UBS AG and Credit Suisse AG, each maintaining its own subsidiaries and branches, serving its clients. and dealing with counterparties.
Pending further integration, Credit Suisse AG will continue to rely on its established risk control and governance frameworks, although some new policies will be implemented to ensure UBS Group has effective supervision.
In addition, the UBS Group Board of Directors and the UBS Group Executive Board will have overall responsibility for the consolidated group.
The combined entity will operate with five business divisions, seven functions and four regions, in addition to Credit Suisse AG and each will be represented by a member of the Group's executive board, all reporting to UBS CEO Sergio Ermotti.
Ulrich Körner, who had previously worked at UBS and was currently CEO of Credit Suisse AG, will become a member of the UBS Group's executive board after the transaction closes.
Likewise, the entity announced that Todd Tuckner, current financial director and head of risk management of the wealth management area, would be appointed group financial director at the closing of the transaction becoming a member of the executive board of UBS with immediate effect, after the Sarah Youngwood's decision to leave the firm after the transaction closes.
On the other hand, among the changes announced, the weight gained in the UBS structure by the Spanish Beatriz Martín Jiménez, who will become head of the Non-Core area, stands out.
On her side, Iqbal Khan will remain Chairman of Global Wealth Management, Rob Karofsky will remain Chairman of Investment Banking, Sabine Keller-Busse will remain Chairman of Personal and Corporate Banking and Chairman of Switzerland, while Suni Harford will remain Chairman of Wealth Management. Assets and Sustainability and Impact Leader.
On the other hand, this Monday UBS has announced that, subject to regulatory approval, the board of Credit Suisse AG will be composed of Lukas Gähwiler (Chairman), Jeremy Anderson (Vice Chairman), Christian Gellerstad (Vice Chairman), Michelle Bereaux, Mirko Bianchi ( until June 30, 2023), Clare Brady, Mark Hughes, Amanda Norton and Stefan Seiler.
As part of the merger, UBS has imposed strict restrictions on Credit Suisse bankers, including a ban on new clients from high-risk countries and on complex financial products, according to the 'Financial Times'.
Prohibited activities include accepting clients from countries such as Libya, Russia, Sudan and Venezuela and launching new products without the approval of UBS managers.
Taken together, the list of restrictions covers 11 financial risks and 12 non-financial risks, and while many of the risks are operational, relating to issues such as research layout and office use, others affect areas of the business of Credit Suisse more directly.
"We will never compromise UBS's strong culture, conservative risk approach or quality service," Colm Kelleher and Sergio Ermotti state in their open letter.