Switzerland: UBS completes acquisition of Credit Suisse
Swiss banking giant UBS completed its acquisition of rival lender Credit Suisse, Switzerland’s second-largest bank, on Monday.
UBS bought Credit Suisse in March for 3 billion Swiss francs (3.09 billion euros, $3.3 billion) in an emergency bailout deal after the latter institution experienced a series of scandals amid criticisms of poor risk management and cash outflows in the hundreds of billions.
The new group will manage $5 trillion in assets. The two banks currently employ 120,000 people worldwide, although UBS has already said it will reduce that workforce.
What is the background to the merger?
UBS and the Swiss government signed the necessary agreement on Friday to guarantee losses from the acquisition, which could reach 5 billion francs.
Swiss authorities facilitated the acquisition to prevent a lack of customer confidence from triggering the collapse of Credit Suisse, which could have triggered a broader banking crisis and damaged the country’s reputation as a major financial center.
UBS and the Swiss government have offered assurances that the acquisition will benefit shareholders and not negatively affect the taxpayer.
Source: DW
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