Skip to main content

UBS, Switzerland’s biggest bank, has agreed to rescue its compatriot Credit Suisse, the country’s authorities announced last night in a deal scrambled together before financial markets opened today.

UBS
UBS, Switzerland’s biggest bank, has agreed to rescue its compatriot Credit Suisse, the country’s authorities announced last night in a deal scrambled together before financial markets opened today.

The SwFr3 billion takeover comes with an SwFr100 billion lifeline in the form of liquidity assistance from the Swiss National Bank.

Finma, Switzerland’s regulator, said there was a risk that Credit Suisse, which had a market value of about £6.5 billion on Friday, could have become «illiquid, even if it remained solvent, and the authorities needed to take action».

But UBS expects cost cuts of more than £6.5 billion by 2027, putting thousands of jobs at risk. Ralph Hamers, 56, the UBS chief, is to head the combined bank.

The emergency deal followed a frantic weekend when regulators moved to avert the failure of a systemically important bank. The Bank of England said it welcomed the «comprehensive set of actions» by the Swiss authorities. To support financial stability. It has been one of Europe’s most troubled lenders, having staggered through scandals and setbacks. These included a $5.5 billion loss from the collapse of Archegos in 2021. This investment firm was a client and became embroiled in the fallout from the implosion of Greensill, the London-based supply chain finance firm, in the same year.

Bosses have been trying to revive the group’s fortunes with a restructuring that involved 9,000 job cuts.

www.sba.tax 

Labels:

Comments

  1. Mario20 March 2023 at 11:32

    A good measure for the financial sector but how will this go for the employees? Some of them will surely get sacked in the following months.

    ReplyDelete
    Replies
    1. Paul20 March 2023 at 14:45

      How many employees do they need to fire to get that £6.5 billion by 2027? I would say at least 10000. But if the same leadership team is kept in place then nothing has changed. These people that sank this bank should be on their way out. And they should have to pay for their mistakes, not find another cozy job at another bank.

      Delete
  2. Manuel20 March 2023 at 14:55

    I don't even want to think what kind of a mess Ralph Hamers will find at Credit Suisse. It's incredible how they could just throw away $5.5 billion in the Archegos "investment". Just goes to show that sometimes people base their investments on hunches or feelings. A bank should never, ever do business this way. If they would have analyzed things they would have never added money to Archegos.

    ReplyDelete

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Google has launched its Bard chat­bot.

  Google has launched its Bard chat­bot in a move to rival OpenAI’s pop­u­lar Chat­GPT, as it seeks to make up lost ground in the race to com­mer­cial­ise gen­er­at­ive arti­fi­cial intel­li­gence tech­no­logy. Google said that Bard, which provides answers to text­based ques­tions, will be run sep­ar­ately from its Google Search engine. In recent weeks, gen­er­at­ive AI has also been integ­rated into widely used pro­ductiv­ity applic­a­tions, such as Google’s Work­space includ­ing Google Docs and Gmail, and Microsoft’s Office 365 soft­ware, as well as into pop­u­lar apps such as Duolingo, allow­ing mil­lions of people to start inter­act­ing with the tech­no­logy. «We want to get feed­back and gradu­ally phase up the num­ber of people who have access to Bard, and the reason for that is we want to be able to test and learn from that before we roll it out very widely,» said Zoubin Ghahramani, vice-pres­id­ent of Google Research. Bard is built on top of Google’s AI tech­no­logy known a...
3 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more