UBS, the major Swiss bank headquartered in Zurich and Basel, completed the emergency takeover of Credit Suisse on June 12. The acquisition ”marks the beginning of a new, historic chapter,“ UBS Group wrote in a press release. Swiss authorities arranged the disputed emergency bailout of Credit Suisse by UBS for 3 billion Swiss francs (€3.07bn) in March.
The merged entity will operate as a consolidated banking group. June 12 was the last trading day for Credit Suisse Group AG shares on the SIX Swiss Exchange. Credit Suisse Group AG ADSs will no longer be traded on the New York Stock Exchange. Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares held.
The merger creates a bank with total assets of about $1.6 trillion, according to UBS CEO Sergio Ermotti. However, this is to be reduced to between $1.35 trillion and $1.4 trillion – an increase of 35 percent for UBS, which runs lower levels of risk than Credit Suisse, according to the CEO.
Ermotti warned of “bumpy” months ahead for the new giant institution. He said the politically forced merger of Switzerland’s largest and second-largest banks will require “waves” of difficult decisions. Analysts say the new big bank is “the most dangerous bank in the world.” If it were to get into trouble, Switzerland would also face hardship because the bank is too big for the country to bail out. Since UBS is considered “too-big-to-fail,” other countries and institutions would have to step in, including Germany, Denmark, Italy, Luxembourg, Austria, Spain and Sweden.
UBS will operate the following governance model pending further integration:
- UBS Group AG will manage two separate parent banks – UBS AG and Credit Suisse AG. Each institution will continue to have its own subsidiaries and branches, serve its clients and deal with counterparties.
- The Board of Directors and Group Executive Board of UBS Group AG will hold overall responsibility for the consolidated group.
In the course of the closing of the acquisition, UBS also announced the appointment of directors for certain Credit Suisse entities. Subject to regulatory approval, the Board of Directors of Credit Suisse AG will consist of Lukas Gähwiler (Chairman), Jeremy Anderson (Vice Chairman), Christian Gellerstad (Vice Chairman), Michelle Bereaux, Mirko Bianchi (until June 30, 2023), Clare Brady, Mark Hughes, Amanda Norton and Stefan Seiler.
Henceforth, UBS will report the consolidated financial results of the combined group in US$.
