BERLIN (AP) — UBS announced on Monday that it has completed its takeover of ailing rival Credit Suisse, nearly three months after the Swiss government hastily negotiated a bailout deal to merge the country's two largest banks in order to bolster Switzerland's reputation as a… protect global financial institution center and stall market turmoil.
A statement from the bank read: “UBS today completed the acquisition of Credit Suisse, marking an important milestone.”
UBS said last week that it expects to close the 3 billion Swiss francs ($3.3 billion) takeover as soon as Monday – the last day of trading for Credit Suisse shares on the Swiss stock exchange. Credit Suisse is also no longer traded on the New York Stock Exchange.
It's a pivotal moment for the two Zurich-based rivals, whose merger has sparked concerns over the expected loss of thousands of jobs, has drawn rebukes and lawsuits over contract terms, and raised fears over the implications of setting up a Swiss megabank big to fail .
“This is a very important moment – not only for UBS, but also for Switzerland as a financial center and for Switzerland as a country,” said UBS CEO Sergio Ermotti on Friday. “So we feel the responsibility, but we are fully motivated.”
Ermotti, who returned to UBS to push through the deal, acknowledged “the coming months will certainly be bumpy” but said the bank is “very focused on getting it right”.
The Swiss government orchestrated the Credit Suisse bailout over a weekend in March after the lender's shares plummeted and customers were quick to withdraw their money, fearing the collapse would further roil global financial markets following the collapse of two US banks could.
“I am delighted that we have successfully completed this pivotal transaction in less than three months, bringing together two global systemically important banks for the first time,” said UBS CEO Colm Kelleher in Monday's statement. “We are now a global Swiss company and together we are stronger.”
Ermotti said, “We will offer our clients an expanded global offering, greater geographic reach and access to even greater expertise.”
UBS Group AG will operate two separate parent banks, UBS and Credit Suisse, each with its own branches and clients.
The 167-year-old Credit Suisse had faced a string of scandals over the years that hit the heart of her business, from hedge fund misbets to failing to prevent money laundering from a Bulgarian cocaine ring to allegations she didn't report brought secret offshore accounts that wealthy Americans used to avoid paying US taxes.
UBS will take on ongoing lawsuits against Credit Suisse and the financial implications they entail, including a recent ruling in Singapore that found Credit Suisse to owe former Georgian Prime Minister Bidzina Ivanishvili hundreds of millions of dollars for failing to secure the billionaire's money in a Manager to protect from a stolen trust.
Credit Suisse is appealing this, as well as a similar case in Bermuda, where Ivanishvili says a bank subsidiary failed to prevent “fraudulent mismanagement” of its assets in two life insurance policies.
The Swiss government has agreed to provide guarantees of 9 billion Swiss francs (nearly 10 billion US dollars) to UBS to cover any losses it may incur as a result of the takeover, after UBS assumed losses of up to 5 billion francs ( $5.5 billion).
This emergency bailout plan is met with political opposition ahead of October's parliamentary elections. The Swiss House of Commons rejected it in a symbolic vote, and lawmakers have agreed to launch an investigation into the deal and events leading up to it. The Swiss public prosecutor's office has already launched an investigation.
Credit Suisse investors have also sued the country's financial regulators after some 16 billion Swiss francs ($17.7 billion) of riskier bonds were wiped out.
The US Federal Reserve, the executive branch of the European Union and others around the world have approved the acquisition. Credit Suisse was ranked as one of 30 major global banks because its collapse posed a greater risk to the financial system.
Bonnell reported from London.