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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 

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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.

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