Credit Suisse Head of Private Markets Group Alois Mueller Departs after 6 Years, 35 Years of Banking Experience and was Rothschild Head of North Asia & UBS Head UHNW APAC Hub Countries
22nd April 2023 | Hong Kong
Credit Suisse Head of Private Markets Group Alois Mueller is departing the bank after 6 years. Alois Mueller has more than 35 years of banking experience and was Rothschild Wealth Management Head of North Asia, and UBS Head UHNW APAC Hub Countries & Head UHNW Switzerland. In 2023 March, 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). More info below.
” Credit Suisse Head of Private Markets Group Alois Mueller Departs after 6 Years, 35 Years of Banking Experience and was Rothschild Head of North Asia & UBS Head UHNW APAC Hub Countries “
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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