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The giant Swiss banking institution UBS Group has announced that it has completed a $3.2 billion takeover of rival Credit Suisse.

Thanks to the hype around AI, our problem of failing banks has subsided slightly. Surely we all remember that the beginning of the bank meltdown that started in the US made its way to Europe and the Swiss bank, which has had various setbacks in the past as well, got into trouble. This move has been talked about since March, when there was a lot of concern that Credit Suisse's $CS+1.0% losses would destabilise the banking system.

UBS Group $UBS-0.8% is a financial services provider founded in Zurich, Switzerland in 1998 that primarily serves private, corporate and institutional clients. The company offers investment, retail, corporate and institutional banking. It also offers securities services, as well as wealth management services with international service. UBS manages the largest volume of private wealth in the world, counting approximately half of the world's billionaires among its clients. As of 2021, UBS is the third largest bank in Europe with a market capitalisation of $61 billion, operating in all major financial centres around the world and with offices in 50 countries.

UBS
$30.10 -$0.24 -0.79%

"Instead of competing, we are now united as we embark on the next chapter of our journey together," Sergio Ermotti, the newly returned CEO of UBS Group, said in a statement this Monday. In the open letter, the bank's bosses also said they would not compromise UBS's "strong culture" or "conservative approach to risk." Risk management failures over several years played a key role in the eventual collapse of Credit Suisse.

In the short term, UBS Group will run UBS and Credit Suisse as separate banks, while questions remain about the future of assets including Credit Suisse's prized retail bank. The enlarged UBS will have a balance sheet of $1.6 trillion and 120,000 employees. Ermotti has previously warned the new group that it "will not be able to create short-term jobs for everyone. The merged company will report its first consolidated results on August 31, 2023.

Following the acquisition, Credit Suisse and its American depositary shares will be delisted from the SIX Swiss Exchange and the New York Stock Exchange, with shareholders receiving one UBS share for every 22.48 Credit Suisse shares held.

What do you think? One would think that in Switzerland, a country where the banking system is outlawed, they wouldn't let the bank fail. The Swiss government eventually agreed to cover losses of up to 9 billion Swiss francs ($10 billion). UBS will absorb the first 5 billion Swiss francs in the deal because the bank is absorbing a portfolio that does not quite "fit" its business and risk profile."


Thanks for the info, I had completely forgotten about this topic and the Credit Suisse takeover. 😅

And as Ondrej writes, hopefully it's all behind us now.

Me too, I wouldn't expect these problems in Switzerland, hopefully it will be quiet again for a while.

I agree, until a few years ago Switzerland's reputation was that they had the safest banking system and the banks here had almost no problems. However, in the end, the opposite was true.

So hopefully this topic is finally over. 😔

I hope so, I believe that the next bank will not be like this for a long time, but I am afraid that the financial system will not learn anyway and we will have it again in a few years. Just take the debt in the US, whatever, let's just push it off and keep going like that.

It's every year with the US debt. It's politics, they're measuring...

Otherwise, a follow-up question for those who have read, does anyone have UBS in their portfolio?

It was only a matter of time before that happened. UBS won't be hurt, they'll get something out of it.

Agreed, probably the same as with $JPM-4.5% and its acquisition with $FRC, certainly won't come to harm in a future perspective.

At first I didn't believe that something like this could happen in Switzerland. On the other hand, I think the buyer bank will make a nice profit on it and it will bring them a nice profit.

I was also quite surprised in March when people started talking about it, after all, one has a history of Switzerland as a kind of banking mecca. Yes, it will only be a plus for UBS in the future.

I wouldn't expect anything like that in Switzerland. This was really unexpected.