Citadel Securities Places $210 Million to $280 Million Bid to Buy Credit Suisse Securities China, Placed on Sale by UBS after Credit Suisse Acquisition in 2023, Credit Suisse Securities Awaiting China Approval to Buyout 49% of China Domestic Partner Founder Securities in Joint Venture
18th January 2024 | Hong Kong
Citadel Securities has placed a $210 million to $280 million bid (CNY 1.5 billion to CNY 2 billion) to buy Credit Suisse Securities China, which was placed on sale by UBS after the Credit Suisse acquisition in 2023. Credit Suisse Securities (China) is currently awaiting China regulatory approval to buyout 49% of China domestic partner Founder Securities in the joint venture. In December 2023, UBS was reported to be closing Credit Suisse onshore wealth management business in China, led by former General Manager of China Merchants Bank Private Banking Wang Jing. In March 2023, Credit Suisse received approval from China regulators to setup a Credit Suisse China onshore wealth management business, with plans to launch in the 1st half of 2023. In December 2023, UBS instructed law firms to recover CHF 651 million of cash bonuses paid to retain Credit Suisse bankers who had later voluntarily left the bank, with Credit Suisse paying a total of CHF 1.2 billion retention bonuses to retain Credit Suisse bankers. Separately, UBS announced UBS & Credit Suisse to complete the merger in 2024, with UBS previously announcing the completion of the CHF 3 billion ($3.3 Billion) Credit Suisse acquisition and merger (holding company) on 12th June 2023 alongside Credit Suisse last trading day on SIX Swiss Exchange. With the acquisition & merger, UBS Group will manage 2 separate banks, UBS and Credit Suisse. UBS (7/12/23): “Following the merger of the holding companies UBS Group AG and CS Group AG on 12 June 2023, the Board of Directors of UBS Group AG has approved the execution of a merger of UBS AG and Credit Suisse AG. Following approvals from their respective Boards, both entities have entered into a definitive merger agreement. The completion of the merger is subject to regulatory approvals and is expected to happen in 2024. Separately, UBS continues to prepare for the planned merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG also in 2024.” In March 2023, UBS acquired Credit Suisse in a Switzerland government engineered takeover.
“ Citadel Securities Places $210 Million to $280 Million Bid to Buy Credit Suisse Securities China, Placed on Sale by UBS after Credit Suisse Acquisition in 2023, Credit Suisse Securities Awaiting China Approval to Buyout 49% of China Domestic Partner Founder Securities in Joint Venture “
UBS Closes Credit Suisse Onshore Wealth Management Business in China, Led by Former General Manager of China Merchants Bank Private Banking Wang Jing
14th December 2023 – UBS has been reported to be closing Credit Suisse onshore wealth management business in China, led by former General Manager of China Merchants Bank Private Banking Wang Jing. In March 2023, Credit Suisse received approval from China regulators to setup a Credit Suisse China onshore wealth management business, with plans to launch in the 1st half of 2023. In December 2023, UBS instructed law firms to recover CHF 651 million of cash bonuses paid to retain Credit Suisse bankers who had later voluntarily left the bank, with Credit Suisse paying a total of CHF 1.2 billion retention bonuses to retain Credit Suisse bankers. Separately, UBS announced UBS & Credit Suisse to complete the merger in 2024, with UBS previously announcing the completion of the CHF 3 billion ($3.3 Billion) Credit Suisse acquisition and merger (holding company) on 12th June 2023 alongside Credit Suisse last trading day on SIX Swiss Exchange. With the acquisition & merger, UBS Group will manage 2 separate banks, UBS and Credit Suisse. UBS (7/12/23): “Following the merger of the holding companies UBS Group AG and CS Group AG on 12 June 2023, the Board of Directors of UBS Group AG has approved the execution of a merger of UBS AG and Credit Suisse AG. Following approvals from their respective Boards, both entities have entered into a definitive merger agreement. The completion of the merger is subject to regulatory approvals and is expected to happen in 2024. Separately, UBS continues to prepare for the planned merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG also in 2024.” In March 2023, UBS acquired Credit Suisse in a Switzerland government engineered takeover.
Credit Suisse Receives Approval to Setup China Onshore Wealth Management Business, Plans Launch in 1st Half of 2023 Led by Former General Manager of China Merchants Bank Private Banking Wang Jing
11th March 2023 – Credit Suisse has received approval from China regulators to setup a Credit Suisse China onshore wealth management business, with plans to launch in the 1st half of 2023 and led by former General Manager of China Merchants Bank Private Banking Wang Jing. In 2022 November, Credit Suisse announced a new strategic plan including focusing on asset & wealth management businesses, and strengthening its business in China with a special focus on wealth management. Credit Suisse is targeting to launch its wealth management services in China by Q1 2023 (taking 100% control of its joint venture Credit Suisse Securities China held by 49% equity partner Founder Securities), with the business led by former General Manager of China Merchants Bank Private Banking Wang Jing. In the Credit Suisse Global Wealth Report 2022, China has 6.1 million HNWs in 2021 and is expected to have 12 million HNWs by 2026 (5 years). The top 5 countries with the most HNWs (millionaires) are United States, China, Japan, United Kingdom & France. The top 5 countries with the most UHNWs (> $50 million) are United States, China, Germany, Canada & India. In the 2022 Q3 earnings announcement, Credit Suisse Wealth Management reported $634 billion AUM (Assets under Management). See below for Credit Suisse strategic review announcement | Credit Suisse Global Wealth Report 2022
UBS to Recover CHF 651 Million Cash Bonuses Paid to Retain Credit Suisse Bankers Who Had Voluntarily Left the Bank, CHF 1.2 Billion Retention Bonuses Paid Out
14th December 2023 – UBS has instructed law firms to recover CHF 651 million of cash bonuses paid to retain Credit Suisse bankers who had later voluntarily left the bank, with Credit Suisse paying a total of CHF 1.2 billion retention bonuses to retain Credit Suisse bankers. Separately, UBS announced UBS & Credit Suisse to complete the merger in 2024, with UBS previously announcing the completion of the CHF 3 billion ($3.3 Billion) Credit Suisse acquisition and merger (holding company) on 12th June 2023 alongside Credit Suisse last trading day on SIX Swiss Exchange. With the acquisition & merger, UBS Group will manage 2 separate banks, UBS and Credit Suisse. UBS (7/12/23): “Following the merger of the holding companies UBS Group AG and CS Group AG on 12 June 2023, the Board of Directors of UBS Group AG has approved the execution of a merger of UBS AG and Credit Suisse AG. Following approvals from their respective Boards, both entities have entered into a definitive merger agreement. The completion of the merger is subject to regulatory approvals and is expected to happen in 2024. Separately, UBS continues to prepare for the planned merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG also in 2024.” In March 2023, UBS acquired Credit Suisse in a Switzerland government engineered takeover.
UBS & Credit Suisse to Complete Merger in 2024, Announced Completion of CHF 3 Billion Credit Suisse Acquisition & Merger on 12th June 2023 Alongside Credit Suisse Last Trading Day on SIX Swiss Exchange with UBS Group to Manage 2 Separate Banks UBS & Credit Suisse
13th December 2023 – UBS has announced UBS & Credit Suisse to complete the merger in 2024, with UBS previously announcing the completion of the CHF 3 billion ($3.3 Billion) Credit Suisse acquisition and merger (holding company) on 12th June 2023 alongside Credit Suisse last trading day on SIX Swiss Exchange. With the acquisition & merger, UBS Group will manage 2 separate banks, UBS and Credit Suisse. UBS (7/12/23): “Following the merger of the holding companies UBS Group AG and CS Group AG on 12 June 2023, the Board of Directors of UBS Group AG has approved the execution of a merger of UBS AG and Credit Suisse AG. Following approvals from their respective Boards, both entities have entered into a definitive merger agreement. The completion of the merger is subject to regulatory approvals and is expected to happen in 2024. Separately, UBS continues to prepare for the planned merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG also in 2024.” In March 2023, UBS acquired Credit Suisse in a Switzerland government engineered takeover. More info below:
UBS Sells Private Jet Used by Ex-Credit Suisse Chairman António Horta-Osório in Breach of COVID-19 Rules Including Flying to London for Wimbledon Tennis Finals in July 2021, Private Jet Dassault Falcon 7X Price is $18 Million for Old Version & $38 Million for Latest Version
7th Dec 2023 – UBS has sold the private jet (Dassault Falcon 7X) used by former Credit Suisse Chairman António Horta-Osório in breach of COVID-19 rules including flying to London for the Wimbledon tennis finals in July 2021, with UBS selling to a subsidiary of Societe Generale. The private jet Dassault Falcon 7X price is around $18 million for old version and $38 million for the latest version. In 2022 February, former Credit Suisse Chairman Antonio Horta-Osorio was fined $2,175 (CHF 2,000) for breaching COVID-19 quarantine rules in Switzerland. In November 2021, Antonio Horta-Osorio had left Switzerland during a 10-day quarantine period. The now former Credit Suisse Chairman Antonio Horta-Osorio had breached COVID-19 rules twice in 2021, breaking Switzerland quarantine rules and attending the Wimbledon tennis finals in London in July 2021 and breaking Britain’s COVID-19 rules. On 21st January 2022, Credit Suisse has appointed Axel P. Lehmann as the new Chairman with immediately effect, with António Horta-Osório resigning following an investigation by the Board for COVID-19 breaches. In March 2023, UBS acquired Credit Suisse in a Switzerland government engineered takeover. More info below:
UBS Announces Completion of CHF 3 Billion Credit Suisse Acquisition & Merger on 12th June 2023 Alongside Credit Suisse Last Trading Day on SIX Swiss Exchange, UBS Group Will Manage 2 Separate Banks UBS and Credit Suisse
12th June 2023 – UBS has announced the completion of the CHF 3 billion ($3.3 Billion) Credit Suisse acquisition and merger on 12th June 2023 alongside Credit Suisse last trading day on SIX Swiss Exchange, with every 22.48 Credit Suisse shares converting into 1 UBS share. With the acquisition & merger, UBS Group will manage 2 separate banks, UBS and Credit Suisse. UBS: “UBS has completed the acquisition of Credit Suisse today, crossing an important milestone. Credit Suisse Group AG has been merged into UBS Group AG and the combined entity will operate as a consolidated banking group. Today marks the last trading day of Credit Suisse Group AG shares on the SIX Swiss Exchange. Credit Suisse Group AG ADS will no longer be traded on the New York Stock Exchange.” On 9th June 2023, UBS and Switzerland government have signed the $9.9 billion loss protection agreement (9/6/23) on UBS acquisition of Credit Suisse, with UBS to assume the first CHF 5 billion losses and the Swiss government to assume next CHF 9 billion losses. See below for full statements.
Colm Kelleher, UBS Group AG Chairman: “I‘m pleased that we’ve successfully closed this crucial transaction in less than three months, bringing together two global systemically important banks for the first time. We are now one Swiss global firm and, together, we are stronger. As we start to operate the consolidated banking group, we’ll continue to be guided by the best interests of all our stakeholders, including investors. Our top priority remains the same: to serve our clients with excellence.”
Sergio P. Ermotti, CEO of UBS Group AG: “Today we welcome our new colleagues from Credit Suisse to UBS. Instead of competing, we’ll now unite as we embark on the next chapter of our joint journey. Together, we’ll present our clients an enhanced global offering, broader geographic reach and access to even greater expertise. We’ll create a bank that our clients, employees, investors and Switzerland can be proud of.”
UBS Announces Completion of CHF 3 Billion Credit Suisse Acquisition & Merger on 12th June 2023 Alongside Credit Suisse Last Trading Day on SIX Swiss Exchange
- UBS completes Credit Suisse acquisition
12th June 2023 – UBS has completed the acquisition of Credit Suisse today, crossing an important milestone. Credit Suisse Group AG has been merged into UBS Group AG and the combined entity will operate as a consolidated banking group.
Today marks the last trading day of Credit Suisse Group AG shares on the SIX Swiss Exchange. Credit Suisse Group AG ADS will no longer be traded on the New York Stock Exchange. As announced on 19 March 2023, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held.
As previously announced, 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.
As it completes the acquisition, UBS announces Board of Director nominations for certain Credit Suisse entities. Subject to regulatory approval, the Credit Suisse AG Board will consist of Lukas Gähwiler (Chair), Jeremy Anderson (Vice-Chair), Christian Gellerstad (Vice-Chair), Michelle Bereaux, Mirko Bianchi (until 30 June 2023), Clare Brady, Mark Hughes, Amanda Norton and Stefan Seiler.
UBS expects its CET1 capital ratio to be around 14% in the second quarter of 2023 and to remain around that level throughout 2023. It anticipates that Credit Suisse’s operating losses and significant restructuring charges will be offset by reductions in RWA. In the future, UBS will report consolidated financial results for the combined group under IFRS in USD. The second-quarter 2023 earnings will be communicated on 31 August 2023.
UBS & Swiss Government Sign $9.9 Billion Loss Protection Agreement on Credit Suisse Acquisition on 9th June 2023, UBS to Assume First CHF 5 Billion Losses & Swiss Government to Assume Next CHF 9 Billion Losses
10th June 2023 – UBS and Switzerland government have signed the $9.9 billion loss protection agreement (9/6/23) on UBS acquisition of Credit Suisse, with UBS to assume the first CHF 5 billion losses and the Swiss government to assume next CHF 9 billion losses. In 2023 March, UBS had acquired Credit Suisse, with the legal merger expected to take place on the 12th of June 2023 (Monday). See below for statement by UBS, and The Federal Council of the Swiss Government. View: Key terms of the loss protection agreement | Loss protection agreement
UBS & Swiss Government Sign $9.9 Billion Loss Protection Agreement on Credit Suisse Acquisition on 9th June 2023
UBS Group AG and the Swiss government have signed a Loss Protection Agreement (LPA) that will become effective upon completion of the acquisition of Credit Suisse, which is expected as early as 12 June 2023.
- Agreement reflects terms of the guarantee determined by the Swiss Confederation’s Ordinance of 19 March 2023
- UBS to bear first CHF 5bn of potential losses realized on a designated portfolio of Credit Suisse non-core assets; the Swiss government to cover next CHF 9bn of potential realized losses
- Agreement effective upon completion of the acquisition
- UBS will manage non-core assets in a prudent and diligent manner to minimize losses and maximize value realization
- UBS bears the initial and ongoing external costs incurred by the Confederation and FINMA for the Agreement
9th June 2023 – UBS Group AG and the Swiss government have signed a Loss Protection Agreement (LPA) that will become effective upon completion of the acquisition of Credit Suisse, which is expected as early as 12 June 2023.
The agreement will remain in effect until the realization of all assets covered by the guarantee, or until it is terminated by UBS.
The LPA sets out the detailed terms of the guarantee authorized by the Swiss Confederation’s Ordinance of 19 March 2023. As part of the agreement, the Swiss government guarantees losses of up to CHF 9bn if realized on a designated portfolio of Credit Suisse non-core assets once UBS bears the first CHF 5bn of any realized losses. UBS will manage these assets in a prudent and diligent manner and intends to minimize any losses and maximize value realization on these assets. It also will cover the initial and ongoing external costs incurred by the Confederation and FINMA for the LPA.
The Federal Council of the Swiss Government
Confederation and UBS sign loss protection agreement
9th June 2023 – UBS has announced that it will probably complete the Credit Suisse takeover on 12 June 2023. The takeover was the key component of the Federal Council’s overall package of 19 March to safeguard financial stability and thus avert damage to the Swiss economy. To make the takeover possible, the federal government provided UBS with a guarantee for potential losses incurred on the realisation of Credit Suisse assets. The loss protection agreement was signed on 9 June 2023. The guarantee will take effect only if the losses arising from the realisation of these assets exceed CHF 5 billion. It is limited to a total of CHF 9 billion. The priority for the federal government and UBS is to minimise potential losses and risks so that recourse to the federal guarantee is avoided to the greatest extent possible. The Federal Council was informed of the loss protection agreement during its meeting on 9 June 2023.
In taking over Credit Suisse, UBS is also taking over a portfolio of assets that are considered non-core to UBS and do not fit its business and risk profile. As part of the takeover of Credit Suisse by UBS, the federal government therefore declared on 19 March that it was prepared to shoulder a portion of any losses arising from the realisation of these assets. Article 14a of the emergency ordinance forms the basis for this. UBS has to bear the first CHF 5 billion of any losses realised when winding down these Credit Suisse assets. If this amount is exceeded, the federal government will assume losses up to a maximum of CHF 9 billion. A net approach will be taken when calculating the losses, which means that any profits from the realisation of the portfolio will also be taken into account.
According to the announcement by UBS, the takeover of Credit Suisse is to be completed as early as 12 June 2023. This takeover became necessary in order to prevent a Credit Suisse bankruptcy or restructuring, which would have had serious ramifications for the Swiss economy and international financial stability. An important element of this takeover has now been finalised, with the Federal Department of Finance (FDF) and UBS signing the associated loss protection agreement on 9 June 2023. The key terms are as follows:
- Portfolio of assets: the loss protection agreement covers a specific portfolio of Credit Suisse assets, which corresponds to approximately 3% of the combined assets of the merged bank. The portfolio includes primarily loans, derivatives, legacy assets and structured products from Credit Suisse’s Non-Core Unit. UBS will provide regular information on its new Non-Core Unit as part of its quarterly reporting.
- Covered losses: in principle, only losses actually realised are covered by the guarantee. Any profits as well as any losses are included in the calculation. Only after the final realisation of the assets can UBS draw the guarantee for any losses exceeding CHF 5 billion from the federal government (up to a maximum of CHF 14 bn).
- Guarantee fee/costs: UBS will pay the federal government a guarantee fee consisting of an initial set-up fee of CHF 40 million, an annual maintenance fee of 0.4% of CHF 9 billion (CHF 36 mn p.a.) to cover the Confederation’s advisory costs, among other things, and an annual drawn portion fee (risk premium) of between 0% and 4% of CHF 9 billion, depending on the already realised losses and those still expected. The greater these losses, the higher the respective risk premium, which will have to be paid only in the event of the guarantee being drawn.
- Duration: the agreement will remain in place until the final realisation of the guaranteed portfolio. UBS may terminate the loss protection agreement at any time, but would thus cease to benefit from the federal loss protection.
Separate organisational unit to manage the assets
The federal guarantee is subject to strict conditions. UBS is obliged to manage the assets in such a way that losses are minimised and realisation proceeds are maximised. The federal government has broad information and audit rights in order to verify this. UBS is required to establish an appropriate organisational structure in the form of a separate organisational unit, including the appointment of an oversight committee and a management team, and to report to the federal government on a quarterly basis. Moreover, UBS is obliged to maintain its headquarters in Switzerland in order to be eligible for a payment under the guarantee.
The federal government’s primary objective is to keep the financial and legal risks for the Confederation, and thus for taxpayers, as low as possible. The priority for both UBS and the federal government is to minimise the asset realisation losses so that recourse to the federal guarantee is avoided to the greatest extent possible.
Public liquidity backstop repaid in full by Credit Suisse
The overall package of 19 March 2023 also included a federal default guarantee for liquidity assistance loans from the Swiss National Bank, up to a maximum of CHF 100 billion (public liquidity backstop, or PLB). As of the end of May, Credit Suisse had repaid its outstanding PLB amounts in full to the Swiss National Bank. Consequently, the Confederation has not yet incurred any losses on the corresponding guarantee, and instead generated receipts of CHF 111 million as of the end of May.
UBS Postpones 2023 Q2 Earnings Results Announcement from 25th July to 31st August 2023, Granted 2 Years Grace Period to 2026 from Switzerland Authorities for Higher Capital Requirements
9th June 2023 – UBS has received approval to postpone the 2023 Q2 (Quarter 2) earnings results announcement from 25th July 2023 to 31st August 2023, and is also granted 2 years grace period to 2026 from Switzerland authorities for higher capital requirements. The information was reported in the United States Securities & Exchange Commission filing. In 2023 March, UBS had acquired Credit Suisse, with the legal merger expected to take place on the 12th of June 2023 (Monday). More info below.
Credit Suisse Expected to Merge Legally into UBS on 12th June 2023, with Credit Suisse Shares to be Delisted from New York Stock Exchange on 12th June 2023 or 13th June 2023 and SIX Swiss Exchange to be Delisted on 13th June 2023
5th June 2023 – Credit Suisse is expected to merge legally (entity) into UBS on 12th June 2023 (Mon), with Credit Suisse shares to be delisted from New York Stock Exchange (NYSE) on 12th June 2023 (Mon) or 13th June 2023 (Tues) and Credit Suisse shares on SIX Swiss Exchange to be delisted on 13th June 2023 (Tues). Credit Suisse (5/6/23): “Credit Suisse Group AG (Credit Suisse) and UBS Group AG (UBS) announced today that the two companies expect the acquisition announced on March 19, 2023, to be consummated as early as June 12, 2023. Upon consummation of the acquisition, UBS will be the surviving entity, and Credit Suisse’s shares and American Depositary Shares (ADS) will be delisted from the SIX Swiss Exchange (SIX) and New York Stock Exchange (NYSE), respectively. Unless otherwise mandated by the NYSE or the SIX, respectively, if the acquisition is consummated before the opening of trading in the US on June 12, 2023, the delisting on the NYSE will occur on June 12, 2023, and the delisting on the SIX will occur on June 13, 2023. If the acquisition is consummated after the opening of trading in the US on June 12, 2023, the delisting on the NYSE and the SIX will both occur on June 13, 2023. Completion of the acquisition is subject to the registration statement of UBS which covers shares to be delivered to Credit Suisse shareholders being declared effective by the Securities and Exchange Commission and to satisfaction, or waiver by UBS, of other remaining closing conditions.”
“ Credit Suisse Expected to Merge Legally into UBS on 12th June 2023, with Credit Suisse Shares to be Delisted from New York Stock Exchange on 12th June 2023 or 13th June 2023 and SIX Swiss Exchange to be Delisted on 13th June 2023 “
Credit Suisse Received Non-Compliance Notice of NYSE Share Price Listing Rule of Average Closing Share Price of at Least $1.00 Over 30 Trading-Day Period & Has 6 Months to Comply, Credit Suisse Will Delist from NYSE and Merge into UBS
1st June 2023 – Credit Suisse has received a non-compliance notice of NYSE (New York Stock Exchange) share price listing rule of average closing share price of at least $1.00 over a 30 trading-day period and has 6 months to comply. Credit Suisse issues a statement that Credit Suisse will delist from NYSE with merger into UBS. Credit Suisse (31/5/23): “Credit Suisse Group AG (Credit Suisse) announced today that the New York Stock Exchange (NYSE) notified Credit Suisse on May 1, 2023, that it is no longer in compliance with the NYSE’s continued listing minimum price criteria set forth in the NYSE Listed Company Manual, which requires listed companies to maintain an average closing share price of at least $1.00 over a consecutive 30 trading-day period. In accordance with NYSE rules, Credit Suisse must disclose receipt of the notice and has six months to regain compliance with the NYSE’s continued listing minimum price criteria. Credit Suisse expects that the deficiency will be cured upon completion of the acquisition by UBS Group AG (UBS) of Credit Suisse that was announced on March 19, 2023. Upon consummation of the acquisition, UBS will be the surviving entity. In connection with the acquisition, Credit Suisse’s ordinary shares underlying its American Depositary Shares will be exchanged for the right to receive a fraction of a UBS ordinary share and as a result delisted from the NYSE.” More info on UBS & Credit Suisse updates below.
UBS & Credit Suisse Offer Private Bankers 0.15% Commission for New Funds, $15,000 Per $10 Million or $150,000 Per $100 Million
30th May 2023 – UBS & Credit Suisse are offering private bankers in Asia 0.15% commission (15 basis points) for bringing in new clients funds (cash), calculated to be $15,000 per $10 million or $150,000 per $100 million (Source: Bloomberg). Credit Suisse (merger with UBS), is also giving key staff, senior management, private bankers & investment bankers retention or performance bonuses (cash, options, UBS shares). Earlier in 2023 May, UBS new CEO Sergio Ermotti is targeting a formal takeover of Credit Suisse by the end of May or June 2023 and communication will be limited until transaction is completed. Earlier in April 2023, UBS Chairman Colm Kelleher said in a shareholder conference (5th April 2023) integrating Credit Suisse will take 3 to 4 years, and there is a huge amount of risk in integrating the businesses. UBS also announced new changes to UBS leadership & operating models, with Credit Suisse to operate independently & Credit Suisse CEO Ulrich Körner to join UBS board, Michelle Bereaux named as UBS Group Integration Officer, and Edmund Koh remains as UBS President of Asia-Pacific. More info below.
UBS Announced New Changes: Credit Suisse to Operate Independently with CEO Ulrich Körner to Join UBS Board, Michelle Bereaux Named as Group Integration Officer, Edmund Koh Remains President of Asia-Pacific
10th May 2023 – UBS which recently acquired Credit Suisse in March 2023 for $3.2 billion, has announced new changes to UBS leadership & operating models, with Credit Suisse to operate independently & Credit Suisse CEO Ulrich Körner to join UBS board, Michelle Bereaux named as UBS Group Integration Officer, and Edmund Koh remains as UBS President of Asia-Pacific. The combined firm will operate with 5 business divisions, 7 functions and 4 regions, and Credit Suisse AG. UBS is anticipating the legal close of the acquisition of Credit Suisse end-May or early June 2023. UBS: “UBS anticipates that the legal close will take place in the next few weeks. At this time, Credit Suisse Group AG (CS) will be merged into UBS Group AG (UBS) and the combined entity will operate as a consolidated banking group. UBS AG and Credit Suisse AG will continue to operate independently for the foreseeable future and UBS will carry out the integration in a phased approach … … UBS Group AG will initially manage the 2 separate parent companies – UBS AG and Credit Suisse AG. Each institution will continue to have its own subsidiaries and branches, serve its clients, and deal with counter-parties”. UBS Group CEO Sergio P. Ermotti: “This is a pivotal moment for UBS, Credit Suisse and the entire banking industry. Together we will solidify and represent the Swiss model for finance around the world, one that is capital-light, less reliant on taking risk and anchored by stability and high-touch service. This transaction will allow us to offer attractive returns to our shareholders and give us capacity to further invest and grow. With the new operating model and leadership team, UBS is well-equipped to build on its existing strength and the successes of the past decade. The integration of the businesses and legal entities will take time. But adding Credit Suisse to UBS’s highly capital-accretive business model, diversified revenue streams, disciplined risk management and balance sheet for all seasons will benefit our clients, employees, investors, the economies we serve and the wider financial system.” More info below.
UBS Announced New Changes
Ad hoc announcement pursuant to Article 53 of the SIX Exchange Regulation Listing Rules
- CS CEO Ulrich Körner to join UBS Group Executive Board at close
- Todd Tuckner to succeed Sarah Youngwood as Chief Financial Officer at close
- Beatriz Martin Jimenez named Head Non-Core and Legacy and President EMEA Region
- Michelle Bereaux named Group Integration Officer
- Stefan Seiler named Group Head Human Resources and Corporate Services
- All five becoming members of the UBS Group Executive Board
9th May 2023 – Following the recent announcement of the planned acquisition of Credit Suisse, UBS outlines its new operating model and leadership team, an important milestone in the combination of the two firms.
UBS anticipates that the legal close will take place in the next few weeks. At this time, Credit Suisse Group AG (CS) will be merged into UBS Group AG (UBS) and the combined entity will operate as a consolidated banking group. UBS AG and Credit Suisse AG will continue to operate independently for the foreseeable future and UBS will carry out the integration in a phased approach.
At the time of legal close, the following governance will apply:
- UBS Group AG will initially manage the two separate parent companies – 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 UBS Group Board of Directors and the UBS Group Executive Board will hold overall responsibility for the consolidated group.
- Pending further integration, Credit Suisse AG will continue to rely on its established governance and risk control frameworks, though some new policies will be put in place to ensure that UBS Group has effective oversight.
UBS Operating model and Group Executive Board
The combined firm will operate with five business divisions, seven functions and four regions, and in addition Credit Suisse AG. Each will be represented by a Group Executive Board member, all of whom will report to Group CEO Sergio P. Ermotti.
Ulrich Körner, as Credit Suisse AG CEO, will become a member of the UBS Group Executive Board upon transaction close. With his knowledge of both organizations, he will be responsible for ensuring Credit Suisse’s operational continuity and client focus, while supporting the integration process.
Divisions
- Iqbal Khan will remain President Global Wealth Management
- Rob Karofsky will remain President Investment Bank
- Sabine Keller-Busse will remain President Personal & Corporate Banking and President Switzerland
- Suni Harford will remain President Asset Management and Lead for Sustainability & Impact
- Beatriz Martin Jimenez will become Head Non-Core and Legacy and President EMEA. She will remain UBS Chief Executive for the UK and will continue in her role as Group Treasurer until a successor is named. With her background in our Investment Bank and as Group Treasurer, as well as her restructuring experience and knowledge of the UK market, she is ideally positioned to lead this work.
Functions
- Todd Tuckner is appointed Group Chief Financial Officer. He will become a member of the Group Executive Board with immediate effect and take on the role of CFO at close of the acquisition. Having joined UBS in 2004, Todd Tuckner is currently CFO and Head Business Performance and Risk Management for Global Wealth Management and has held various leadership roles across Finance in the US and Switzerland. He will succeed Sarah Youngwood, who has decided to leave the firm after the transaction closes. Since joining UBS in 2022, Sarah has helped put UBS in the financial position necessary to make this acquisition. We thank Sarah for her contribution and wish her well for the future.
- Michelle Bereaux will be Group Integration Officer. She has spent nearly 23 years at UBS and has held various leadership roles across the firm. Michelle Bereaux served as Chief Operating Officer and Head of Human Resources for the Investment Bank, led multiple firm-wide transformation projects and, most recently, was Chief Operating Officer and UK Country Head of UBS’s Asset Management business.
- Mike Dargan will be Group Chief Operations and Technology Officer
- Stefan Seiler will be Group Head Human Resources and Corporate Services. In this role, he will bring Human Resources and Corporate Services closer to ensure an effective and efficient alignment of employees, real estate and vendor management strategies. Having joined UBS in 2011, Stefan Seiler became Group Head of Human Resources in 2018. Previously, he was Head of Human Resources for Region Switzerland and Group Functions, and Head Talent and Recruiting.
- Christian Bluhm will remain Group Chief Risk Officer
- Barbara Levi will remain Group General Counsel
- Markus Ronner will remain Group Chief Compliance and Governance Officer
Upon transaction close, all Credit Suisse Executive Board members and permanent guests who are also division and function heads will report to both their respective UBS Executive Board member and Ulrich Körner. This will ensure that Credit Suisse remains accountable for its day-to-day operations, while facilitating the integration of the respective areas into UBS over time. As previously announced, UBS will evaluate all options for Credit Suisse’s Swiss business and will communicate further on this matter in the coming months.
Regions
- Naureen Hassan will remain President Americas
- Sabine Keller-Busse will remain President Switzerland
- Edmund Koh will remain President Asia-Pacific
- Beatriz Martin Jimenez will become President EMEA
UBS is confident that it has the right operating model and leadership team for a successful integration. It is committed to providing regular updates on the integration process over time.
UBS New CEO Sergio Ermotti Targets Formal Takeover of Credit Suisse by End-May or June 2023 & Communication will be Limited Until Transaction is Completed, Integrating Credit Suisse Will Take 3 to 4 Years
5th May 2023 – UBS new CEO Sergio Ermotti is targeting a formal takeover of Credit Suisse by the end of May or June 2023 and communication will be limited until transaction is completed. Earlier in April 2023, UBS Chairman Colm Kelleher said in a shareholder conference (5th April 2023) integrating Credit Suisse will take 3 to 4 years, and there is a huge amount of risk in integrating the businesses. More info below.
UBS Hires Management Consulting Group Oliver Wyman to Advise on Credit Suisse Integration, Project to Run for a Few Years
29th April 2023 – UBS has hired management consulting group Oliver Wyman to advise on Credit Suisse integration, with the project expected to run for a few years. Earlier in April 2023, UBS Chairman Colm Kelleher said in a shareholder conference (5th April 2023) integrating Credit Suisse will take 3 to 4 years, and there is a huge amount of risk in integrating the businesses. More info below.
UBS Chairman Colm Kelleher Says Integrating Credit Suisse Will Take 3 to 4 Years, Huge Amount of Risk in Integrating the Businesses
15th April 2023 – UBS Chairman Colm Kelleher had said in a shareholder conference (5th April 2023) integrating Credit Suisse will take 3 to 4 years, and there is a huge amount of risk in integrating the businesses. UBS Chairman Colm Kelleher: “ You have to understand that there is huge amount of risk in integrating these businesses … …I understand that not all stakeholders of UBS and Credit Suisse are pleased with this approach. However, all parties and particularly the Swiss authorities consider this solution the best of all available options.” UBS CEO Sergio Ermotti also told Credit Suisse staff to focus on clients and keep the business running, with instructions from Swiss Federal Council for Credit Suisse to have no variable bonuses for top managers and lower level managers to receive less bonuses. UBS & Credit Suisse with combined 124,000 employees may also reduce total global workforce by 36,000 (26,000 global, 11,000 in Switzerland), representing 30% of total UBS & Credit Suisse employees post-merger.
UBS New CEO Sergio Ermotti Tells Credit Suisse Staff to Focus on Clients & Keep Business Running, No Variable Bonuses for Top Managers & Lower Level Managers to Receive Less Bonuses, May Reduced 30% of UBS & Credit Suisse 124,000 Workforce Post-Merger
7th April 2023 – to focus on clients and keep the business running, with instructions from Swiss Federal Council for Credit Suisse to have no variable bonuses for top managers and lower level managers to receive less bonuses. UBS & Credit Suisse with combined 124,000 employees may also reduce total global workforce by 36,000 (26,000 global, 11,000 in Switzerland), representing 30% of total UBS & Credit Suisse employees post-merger. Currently, UBS has around 74,000 employees and Credit Suisse has around 50,000 employees. In late March 2023, UBS appointed ex-CEO Sergio P. Ermotti as UBS new CEO (5th April 2023) after the acquisition of Credit Suisse with Ralph Hamers remaining as advisor. Sergio P. Ermotti was UBS CEO for 9 years (2011 to 2020), leading UBS from the aftermath of the 2008 Global Financial Crisis by focusing on global wealth & asset management business. More info below.
UBS & Credit Suisse with Combined 124,000 Employees May Reduce Total Global Workforce by 36,000, Representing 30% of Total Employees Post-Merger
5th April 2023 – UBS & Credit Suisse with combined 124,000 employees may reduce total global workforce by 36,000 (26,000 global, 11,000 in Switzerland), representing 30% of total UBS & Credit Suisse employees post-merger. Currently, UBS has around 74,000 employees and Credit Suisse has around 50,000 employees. In late March 2023, UBS appointed ex-CEO Sergio P. Ermotti as UBS new CEO (5th April 2023) after the acquisition of Credit Suisse with Ralph Hamers remaining as advisor. Sergio P. Ermotti was UBS CEO for 9 years (2011 to 2020), leading UBS from the aftermath of the 2008 Global Financial Crisis by focusing on global wealth & asset management business. More info below.
” UBS & Credit Suisse with Combined 124,000 Employees May Reduce Total Global Workforce by 36,000, Representing 30% of Total Employees Post-Merger “
UBS Appoints Ex-CEO Sergio P. Ermotti as UBS CEO after the Acquisition of Credit Suisse with Ralph Hamers Remaining as Advisor, Was CEO for 9 Years Leading UBS from the aftermath of 2008 Global Financial Crisis by Focusing on Global Wealth & Asset Management Business
29th March 2023 – UBS has appointed ex-CEO Sergio P. Ermotti as UBS new CEO (5th April 2023) after the acquisition of Credit Suisse with Ralph Hamers remaining as advisor. Sergio P. Ermotti was UBS CEO for 9 years (2011 to 2020), leading UBS from the aftermath of the 2008 Global Financial Crisis by focusing on global wealth & asset management business. UBS: “He will succeed Ralph Hamers, who has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country. Ralph Hamers will remain at UBS and work alongside Sergio P. Ermotti as an advisor during a transition period to ensure a successful closure of the transaction and a smooth hand-over. The Board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition … … Sergio P. Ermotti was the Group Chief Executive Officer of UBS for 9 years and successfully repositioned UBS following the severe challenges arising from the Global Financial Crisis. In particular, he built financial strength and improved resilience by putting the firm’s leading global wealth and asset management business, and Swiss universal bank, at its core. He swiftly transformed the investment bank by cutting its footprint and achieved a profound culture change within the bank which allowed it to regain the trust of clients and other stakeholders, while restoring people’s pride in working for UBS. This unique experience, together with his deep understanding of the financial services industry in Switzerland and globally, make Sergio P. Ermotti ideally placed to pursue the integration of Credit Suisse. Sergio P. Ermotti is currently Chairman of Swiss Re.” See below for full statement.
UBS Chairman Colm Kelleher: “Ralph has been an outstanding CEO of UBS, driving the group to unprecedented success despite a challenging environment. Under his leadership UBS built the strengths that have put us in a position to stabilize Credit Suisse and ensure a successful integration. On behalf of the whole Board, I would like to express my deep respect and gratitude for all that Ralph has achieved over the last two-and-a-half years and for his instrumental role in delivering the Credit Suisse deal, as well as his understanding of the current situation and willingness to step down. While the acquisition will support UBS’s existing strategy, it imposes new priorities on us. With his unique experience, I am very confident that Sergio will deliver the successful integration that is so essential for both banks’ clients, employees and investors, and for Switzerland. I know Sergio will hit the ground running.”
Ralph Hamers: “Integrating Credit Suisse is UBS’s single most important task and I am confident that Sergio will successfully guide the bank through this next phase. I am of course sorry to leave UBS, but circumstances have changed in ways that none of us expected. I am stepping aside in the interests of the new combined entity and its stakeholders, including Switzerland and its financial sector – it has been a pleasure and privilege to lead this great bank to where it is today. I would like to thank Colm and the Board for their support and guidance, and I wish Sergio every success. I will support him during a transition period and I know he will lead UBS very effectively in the interests of all.”
Sergio P. Ermotti: “I am honored to be asked to lead this bank at a time that is so important for all its stakeholders and for Switzerland. I would like to express my gratitude to Ralph for steering UBS so successfully. The task at hand is an urgent and challenging one. In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options. I am conscious of the uncertainty many feel and I promise that, together with my colleagues, our full attention will be on delivering the best possible outcome for our clients, our employees, our shareholders and the Swiss government.”
UBS Appoints Ex-UBS CEO Sergio P. Ermotti as UBS CEO after the Acquisition of Credit Suisse with Ralph Hamers Remaining as Advisor
The Board of Directors of UBS Group AG (UBS) announces today that it has named Sergio P. Ermotti as its new Group Chief Executive Officer, effective 5 April 2023
- The Board made the decision to appoint Sergio P. Ermotti as Chief Executive Officer in light of UBS’s new priorities following its planned acquisition of Credit Suisse
- The Board of Directors of UBS Group AG (UBS) announces today that it has named Sergio P. Ermotti as its new Group Chief Executive Officer, effective 5 April 2023
Ad hoc announcement pursuant to Article 53 of the SIX Exchange Regulation Listing Rules:
- Ralph Hamers will remain at UBS and work alongside Sergio P. Ermotti as an advisor during a transition period to ensure a successful closure of the transaction and a smooth hand-over
- The Board wishes to express its deep gratitude to Ralph Hamers for his outstanding leadership, steering UBS to record results in two successive years, and for his instrumental role in bringing about the Credit Suisse acquisition
29th March 2023 – Further to the announcement of 19 March 2023 regarding UBS’s acquisition of Credit Suisse, the Board of Directors of UBS have appointed Sergio P. Ermotti as Group Chief Executive Officer and President of the Group Executive Board, effective on 5 April 2023, after the Annual General Meeting. He will succeed Ralph Hamers, who has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country. Ralph Hamers will remain at UBS and work alongside Sergio P. Ermotti as an advisor during a transition period to ensure a successful closure of the transaction and a smooth hand-over. The Board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition.
Sergio P. Ermotti was the Group Chief Executive Officer of UBS for 9 years and successfully repositioned UBS following the severe challenges arising from the Global Financial Crisis. In particular, he built financial strength and improved resilience by putting the firm’s leading global wealth and asset management business, and Swiss universal bank, at its core. He swiftly transformed the investment bank by cutting its footprint and achieved a profound culture change within the bank which allowed it to regain the trust of clients and other stakeholders, while restoring people’s pride in working for UBS. This unique experience, together with his deep understanding of the financial services industry in Switzerland and globally, make Sergio P. Ermotti ideally placed to pursue the integration of Credit Suisse. Sergio P. Ermotti is currently Chairman of Swiss Re. To facilitate an orderly transition at Swiss Re, Sergio P. Ermotti will stand for re-election at its AGM on 12 April 2023 and intends to step down after the AGM, following a short hand-over period.
Since assuming the role on 1 November 2020, Ralph Hamers, together with the Group Executive Board, has successfully managed UBS through a challenging market environment and has delivered record results in two successive years. He has encouraged a strong focus on clients and on shaping and executing our strategy, while ensuring tight cost management and strong risk discipline. He has driven the digital and sustainability agenda across the firm to make them important differentiators for our clients. The financial performance and capital strengths of the group have allowed him to achieve record returns for shareholders through dividends and share repurchases, which has benefited the share price. Finally, Ralph was instrumental in delivering the acquisition of Credit Suisse under extreme circumstances, to the benefit of both banks and the stability of the Swiss financial system.
Sergio P. Ermotti
Sergio P. Ermotti was elected to the Board of Directors of Swiss Re Ltd in 2020 and has been Chairman of the Board of Directors since April 2021. He chairs the Governance and Nomination Committee.
Professional experience
Sergio P. Ermotti was Group Chief Executive Officer of UBS Group from September 2011 to October 2020, having joined the Group Executive Board in April 2011. Prior to this, he was at UniCredit Group, serving as Head of the Markets & Investment Banking Division as of December 2005, and, from 2007 to 2010, as Group Deputy Chief Executive Officer responsible for Corporate and Investment Banking and Private Banking. Between 1987 and 2004, he held various positions at Merrill Lynch & Co. in the areas of equity derivatives and capital markets. He became Co-Head of Global Equity Markets and a member of the Executive Management Committee for Global Markets & Investment Banking in 2001.
Educational background
- Swiss-certified banking expert
- Advanced Management Programme, University of Oxford, United Kingdom
External mandates
- Board member (Lead Non-Executive Director) of Ermenegildo Zegna N.V.
- Board member of Innosuisse – Swiss Innovation Agency
UBS to Acquire 167-Year-Old Credit Suisse for $3.24 Billion with $5.4 Billion in Losses Guaranteed, UBS Bailout in 2008 by Swiss Government with CHF 20 Billion Losses
20th March 2023 – UBS (the largest bank in Switzerland) has announced to acquire 167-year-old Credit Suisse for $3.24 billion (transaction to close end 2023) with $5.4 billion in losses guaranteed by Swiss Government in the latest casualty of the 2023 Banking Crisis (Silicon Valley & Signature Bank, First Republic Bank averted a collapse). Over the last 3 years, Credit Suisse had been hit with numerous lawsuits and losses, including from $120 billion Archegos family office, $10 billion Greensill supply-chain fund and ongoing billion-dollar lawsuit by former Georgia Prime Minister Bidzina Ivanishvili for losing $1.27 billion & failing to safeguard his investments. 15 years ago in 2008, UBS was bailout by the Swiss Government ($6.1 billion, $66 billion in guarantee for bad securities) after recording CHF 20 billion losses (United States Subprime – Real Estate funds & derivatives), and subsequently investigated by United States authorities for helping American clients to evade tax. Key Facts: On 19th March 2023 (Sunday), the Swiss Federal Department of Finance, the Swiss National Bank and FINMA have asked Credit Suisse and UBS to enter into the merger agreement. UBS will be the surviving entity upon closing of the merger transaction. All shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse as merger consideration. This exchange ratio reflects a merger consideration of CHF 3 billion for all shares in Credit Suisse. Credit Suisse’s Additional Tier 1 Capital (deriving from the issuance of Tier 1 Capital Notes) in the aggregate nominal amount of approximately CHF 16 billion will be written off to zero. For the purpose of a seamless integration of Credit Suisse into UBS, UBS is expected to appoint key personnel to Credit Suisse as soon as legally possible. The merger is expected to be consummated by end of 2023. Colm Kelleher will be Chairman and Ralph Hamers will be Group CEO of the combined entity. Swiss Emergency Ordinance: In consideration of the unique circumstances affecting the Swiss economy as a whole, the Swiss Federal Council is issuing an emergency ordinance (Notverordnung) tailored to this particular transaction. Most importantly, the merger will be implemented without the otherwise necessary approval of the shareholders of UBS and Credit Suisse to enhance deal certainty. More info on UBS acquiring Credit Suisse below.
UBS to Acquire 167-Year-Old Credit Suisse for $3.24 Billion with $5.4 Billion in Losses Guaranteed
Key Facts: On 19th March 2023 (Sunday), the Swiss Federal Department of Finance, the Swiss National Bank and FINMA have asked Credit Suisse and UBS to enter into the merger agreement. UBS will be the surviving entity upon closing of the merger transaction. All shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse as merger consideration. This exchange ratio reflects a merger consideration of CHF 3 billion for all shares in Credit Suisse. Credit Suisse’s Additional Tier 1 Capital (deriving from the issuance of Tier 1 Capital Notes) in the aggregate nominal amount of approximately CHF 16 billion will be written off to zero. For the purpose of a seamless integration of Credit Suisse into UBS, UBS is expected to appoint key personnel to Credit Suisse as soon as legally possible. The merger is expected to be consummated by end of 2023. Colm Kelleher will be Chairman and Ralph Hamers will be Group CEO of the combined entity.
Swiss Emergency Ordinance: In consideration of the unique circumstances affecting the Swiss economy as a whole, the Swiss Federal Council is issuing an emergency ordinance (Notverordnung) tailored to this particular transaction. Most importantly, the merger will be implemented without the otherwise necessary approval of the shareholders of UBS and Credit Suisse to enhance deal certainty.
Financial
- All shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse as merger consideration. This exchange ratio reflects a merger consideration of CHF 3 billion for all shares in Credit Suisse.
- UBS benefits from CHF 25 billion of downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets. Both banks have unrestricted access to the Swiss National Bank existing facilities, through which they can obtain liquidity from the SNB in accordance with the guidelines on monetary policy instruments.
- The combination is expected to create a UBS business with more than USD 5 trillion in total invested assets and sustainable value opportunities. It will further strengthen UBS’s position as the leading Swiss-based global wealth manager with more than USD 3.4 trillion in invested assets on a combined basis, operating in the most attractive growth markets.
- The transaction reinforces UBS’s position as the leading universal bank in Switzerland. The combined businesses will be a leading asset manager in Europe, with invested assets of more than USD 1.5 trillion.
Axel P. Lehmann, Chairman of the Board of Directors of Credit Suisse: “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome. This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”
UBS Chairman Colm Kelleher: “This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. We have structured a transaction which will preserve the value left in the business while limiting our downside exposure. Acquiring Credit Suisse’s capabilities in wealth, asset management and Swiss universal banking will augment UBS’s strategy of growing its capital-light businesses. The transaction will bring benefits to clients and create long-term sustainable value for our investors.”
UBS Chief Executive Officer Ralph Hamers: “Bringing UBS and Credit Suisse together will build on UBS’s strengths and further enhance our ability to serve our clients globally and deepen our best-in-class capabilities. The combination supports our growth ambitions in the Americas and Asia while adding scale to our business in Europe, and we look forward to welcoming our new clients and colleagues across the world in the coming weeks.”
$56 Billion UBS to Explore Buying $8.05 Billion Credit Suisse in Parts or in Full, Urged by Swiss Regulator FINMA
18th March 2023 – UBS with $56 billion market value (17/3/23) is exploring options to buy Credit Suisse with market value of $8.05 billion (17/3/23) in parts or in full, urged by Swiss regulator FINMA (Swiss Financial Market Supervisory Authority). Both UBS & Credit Suisse board members are expected to meet separately this weekend, regarding the acquisition options (Media Reports by Bloomberg & Financial Times, citing UBS & Credit Suisse decline to comment). In 2022, UBS reported net profit of $7.6 billion while Credit Suisse reported a net loss of $7.9 billion.
Over the last 3 years, Credit Suisse had been hit with numerous lawsuits and losses, including from $120 billion Archegos family office, $10 billion Greensill supply-chain fund and ongoing billion-dollar lawsuit by former Georgia Prime Minister Bidzina Ivanishvili for losing $1.27 billion & failing to safeguard his investments.
On 15th March 2023, Switzerland central bank Swiss National Bank (SNB) & supervisory authority FINMA (Swiss Financial Market Supervisory Authority) has issued a statement on the risks of banking contagion from United States – United States bank problems pose no direct risk to Swiss financial markets, Credit Suisse stock & debts prices affected and Swiss National Bank will provide Credit Suisse with liquidity. On 16th February 2023, Credit Suisse exercised its option to borrow $54 billion (CHF 50 billion) from Swiss National Bank (SNB, Switzerland central bank) and announced an offer to buyback $3.2 billion of senior debts with offer expiring on 23rd March. More info below
- Switzerland Regulator Concludes $10 Billion Supply Chain Fund Greensill Proceeding Against Credit Suisse, Serious Breach of Supervisory & Risk Management and 4 Enforcements to be Taken Against Credit Suisse Managers
- Credit Suisse Paid $210 Million to Former Georgia Prime Minister Bidzina Ivanishvili, Ongoing Lawsuit for Credit Suisse Trust in Singapore for Losing $1.27 Billion & Failing to Safeguard Investments in Fraud by Former Switzerland Based Private Banker Patrice Lescaudron
- Credit Suisse Share Price Down 53.6% YTD with Market Capitalisation of $11.9 Billion, In Restructuring after $120 Billion Archegos Family Office, $10 Billion Greensill Funds & Senior Executives Departures
- Credit Suisse Report: Archegos Family Office Had $120 Billion Total Exposure
Central Bank Swiss National Bank & Supervisory Authority FINMA Statement: United States Bank Problems Pose No Direct Risk to Swiss Financial Markets, Credit Suisse Stock & Debts Prices Affected and Will Provide Credit Suisse with Liquidity
16th March 2023 – Switzerland central bank Swiss National Bank (SNB) & supervisory authority FINMA (Swiss Financial Market Supervisory Authority) has issued a statement on the risks of banking contagion from United States – United States bank problems pose no direct risk to Swiss financial markets, Credit Suisse stock & debts prices affected and Swiss National Bank will provide Credit Suisse with liquidity. SNB & FINMA: “ Problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets. The strict capital and liquidity requirements applicable to Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks. If necessary, the SNB will provide CS with liquidity.” 16th March 2023 – Credit Suisse has exercised its option to borrow $54 billion (CHF 50 billion) from Swiss National Bank (SNB, Switzerland central bank) and announced an offer to buyback $3.2 billion of senior debts with offer expiring on 23rd March. Credit Suisse share price had decreased -35.2% in the last 5 days, YTD (Year-to-date) is at –41.1% and 1 year performance is -76.2%, and with current market value of $7.29 billion (16/3/23 CHF 1.70). Some of the largest banks in Switzerland are Credit Suisse, UBS, Julius Baer, Julius Baer, Vontobel, Pictet Group, Lombard Odier Group, J. Safra Sarasin, UBP (Union Bancaire Privée) & EFG Bank. See below for statement & more info below.
Central Bank Swiss National Bank & Supervisory Authority FINMA Statement
The Swiss National Bank SNB and the Swiss Financial Market Supervisory Authority FINMA assert that the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets. The strict capital and liquidity requirements applicable to Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks. If necessary, the SNB will provide CS with liquidity.
15th March 2023 – The SNB and FINMA are pointing out in this joint statement that there are no indications of a direct risk of contagion for Swiss institutions due to the current turmoil in the US banking market.
Regulation in Switzerland requires all banks to maintain capital and liquidity buffers that meet or exceed the minimum requirements of the Basel standards. Furthermore, systemically important banks have to meet higher capital and liquidity requirements. This allows negative effects of major crises and shocks to be absorbed.
Credit Suisse’s stock exchange value and the value of its debt securities have been particularly affected by market reactions in recent days. FINMA is in very close contact with the bank and has access to all information relevant to supervisory law. Against this background, FINMA confirms that Credit Suisse meets the higher capital and liquidity requirements applicable to systemically important banks. In addition, the SNB will provide liquidity to the globally active bank if necessary. FINMA and the SNB are following developments very closely and are in close contact with the Federal Department of Finance to ensure financial stability.
Credit Suisse Exercised Option to Borrow $54 Billion from Swiss National Bank & Announced Offer to Buyback $3.2 Billion of Senior Debts with Offer Expiring on 23rd March, Credit Suisse Share Price 5 Days -35.2%, YTD -41.1% & 1 Year -76.2% with Market Value of $7.29 Billion
16th March 2023 – Credit Suisse has exercised its option to borrow $54 billion (CHF 50 billion) from Swiss National Bank (SNB, Switzerland central bank) and announced an offer to buyback $3.2 billion of senior debts with offer expiring on 23rd March. Credit Suisse share price had decreased -35.2% in the last 5 days, YTD (Year-to-date) is at –41.1% and 1 year performance is -76.2%, and with current market value of $7.29 billion (16/3/23 CHF 1.70). On 14th March 2023, Credit Suisse released its 2022 Annual Report stating the bank had identified “material weakness” in internal controls over financial reporting and not yet stemmed customer outflows. On 11th March 2023, Swiss financial regulator FINMA (Financial Market Supervisory Authority) has concluded its review with no further action on potential misleading remarks by Credit Suisse Chairman Axel Lehmann on Credit Suisse asset outflows in December 2022, commenting outflow had stabilized in early December 2022 with “outflow flattened out & partial inflow”. On 9th March 2023, Credit Suisse announced the delay in releasing Credit Suisse 2022 Annual Report (Financials), following a call with the United States SEC (Securities & Commission) on disclosed revisions of the Credit Suisse consolidated cash flow statements for 2019 & 2020 (8/3/23, Wednesday). See below for more information.
Credit Suisse Exercised Option to Borrow $54 Billion from Swiss National Bank & Announced Offer to Buyback $3.2 Billion of Senior Debts with Offer Expiring on 23rd March
Credit Suisse Group takes decisive action to pre-emptively strengthen liquidity and announces public tender offers for debt securities
16th March 2023 – Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets. Credit Suisse also announces offers by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to approximately CHF 3 billion.
Credit Suisse announces its intention to access the SNB’s Covered Loan Facility as well as a short-term liquidity facility of up to approximately CHF 50 billion in aggregate. This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs.
Credit Suisse also announces today that it is making a cash tender offer in relation to ten US dollar denominated senior debt securities for an aggregate consideration of up to USD 2.5 billion. Concurrently, Credit Suisse is also announcing a separate cash tender offer in relation to four Euro denominated senior debt securities for an aggregate consideration of up to EUR 500 million. Both offers are subject to various conditions as set out in the respective tender offer memoranda. The offers will expire on March 22, 2023, subject to the terms and conditions set out in the offer documents. The transactions are consistent with our proactive approach to managing our overall liability composition and optimizing interest expense and allow us to take advantage of current trading levels to repurchase debt at attractive prices.
CEO Ulrich Koerner said: “These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders. We thank the SNB and FINMA as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.”
As a global systemically important bank, Credit Suisse, like its global peers, is subject to high standards for capital, funding, liquidity and leverage requirements. As of the end of 2022, Credit Suisse had a CET1 ratio of 14.1% and an average liquidity coverage ratio1 (LCR) of 144%, which has since improved to approximately 150% (as of March 14, 2023). The use of the Covered Loan Facility of CHF 39 billion will further strengthen the LCR with immediate effect. Credit Suisse is conservatively positioned against interest rate risks. The volume of duration fixed income securities is not material compared to the overall HQLA (high quality liquid assets) portfolio and, in addition, is fully hedged for moves in interest rates. Moreover, the loan book is highly collateralized at almost 90%, with more than 60% in Switzerland and an average provision for credit loss ratio of 8 bps across Wealth Management and the Swiss Bank2.
Following the Group’s strategy announcement on October 27, 2022, Credit Suisse has made significant progress toward this transformation and on an accelerated schedule to build the foundation for the new Credit Suisse. Its strategy includes decisive actions to radically restructure the Investment Bank, including the substantial exit from the Securitized Products Group where the bank has already achieved more than 70% of the targeted asset reduction. The bank has also accelerated its cost transformation and is well on track to deliver CHF ~2.5 billion of cost base reductions by 2025, including CHF ~1.2 billion in 2023.
Credit Suisse Announced Delay Release of 2022 Annual Report Following Call with United States SEC on Disclosed Revisions of Consolidated Cash Flow Statements for 2019 & 2020
9th March 2023 – Suisse 2022 Annual Report (Financials), following a call with the United States SEC (Securities & Commission) on disclosed revisions of the Credit Suisse consolidated cash flow statements for 2019 & 2020 (8/3/23, Wednesday). Credit Suisse: “Credit Suisse Group announces today that it will delay the publication of its 2022 Annual Report and related Annual Report on Form 20-F following a late call on the evening of March 8, 2023, from the U.S. Securities and Exchange Commission (SEC) in relation to certain open SEC comments about the technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls. For more information, please see Note 1 – Summary of significant accounting policies – revisions of prior period financial statements to the consolidated financial statements for the period ended December 31, 2021, in our annual report on Form 20-F for the fiscal year ended December 31, 2021. Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received. We confirm the 2022 financial results as previously released on February 9, 2023, are not impacted by the above.” In February 2023, Swiss financial regulator FINMA is reviewing potential misleading remarks by Credit Suisse Chairman Axel Lehmann on asset outflows in December 2022, commenting outflow had stabilized in early December 2022 with “outflow flattened out & partial inflow”. In 2023 February (9/2/23), Credit Suisse reported outflow of $119 billion (CHF 110.5 billion) in the last 3 months of 2022. For 2022, Credit Suisse reported net loss of CHF 3.2 billion and total assets of CHF 1.294 billion with net asset outflow of CHF 123.2 billion.
Credit Suisse Announced Delay Release of 2022 Annual Report Following Call with United States SEC on Disclosed Revisions of Consolidated Cash Flow Statements for 2019 & 2020
Credit Suisse
Credit Suisse is one of the world’s leading financial services providers. The bank’s strategy builds on its core strengths: its position as a leading wealth manager, its specialist investment banking and asset management capabilities and its strong presence in its home market of Switzerland. Credit Suisse seeks to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. The bank employs more than 50,000 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
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