Global wealth manager UBS has completed the acquisition of Swiss banking giant Credit Suisse for a total consideration of CHF3bn (£2.7bn, $3.2bn, €3bn).
This comes months after the deal was first announced.
Credit Suisse Group has been merged into UBS Group and the combined entity will operate as a consolidated banking group.
12 June marks the last trading day of Credit Suisse Group shares on the SIX Swiss Exchange. Credit Suisse Group will no longer be traded on the New York Stock Exchange. As announced on 19 March 2023, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held.
As previously announced, UBS will operate the following governance model pending further integration:
- UBS Group will manage two separate parent banks – UBS and Credit Suisse. Each institution will continue to have its own subsidiaries and branches, serve its clients and deal with counterparties.
- The board of directors and group executive board of UBS Group will hold overall responsibility for the consolidated group.
In May 2023, UBS announced its post-merger management team.
Colm Kelleher, UBS Group chairman, said: “I‘m pleased that we’ve successfully closed this crucial transaction in less than three months, bringing together two global systemically important banks for the first time.
“We are now one Swiss global firm and, together, we are stronger. As we start to operate the consolidated banking group, we’ll continue to be guided by the best interests of all our stakeholders, including investors. Our top priority remains the same: to serve our clients with excellence.”
Sergio Ermotti, chief executive of UBS Group, added: “Today we welcome our new colleagues from Credit Suisse to UBS. Instead of competing, we’ll now unite as we embark on the next chapter of our joint journey. Together, we’ll present our clients an enhanced global offering, broader geographic reach and access to even greater expertise. We’ll create a bank that our clients, employees, investors and Switzerland can be proud of.”
Struggles of Credit Suisse
The merger comes after Credit Suisse agreed a deal for $54bn of extra funding with Switzerland’s central bank.
Credit Suisse saw its shares plunge over 30% on 15 March as insolvency rumours spread.
The bank warned it had identified ‘weakness’ in its balance sheet and has put out a series of poor results updates of late. This all followed huge losses in 2021 stemming from its relationship with failed American hedge fund Archegos.
The fears over it collapsing prompted a big sell-off across the market, with banks hit the hardest.
In November 2021, Swiss banking giant Credit Suisse announced it was combining its wealth management operations into a single global division as part of its plan to revamp its business structure and divert away from investment banking.
The group was reorganised into four divisions – wealth management, investment bank, Swiss bank and asset management – and four regions – Switzerland; Europe, Middle East and Africa (Emea); Asia Pacific (Apac) and Americas.
The bank said at the time it would be “deploying” CHF3bn of capital to its wealth management division, as well as increase the ratio of capital allocated to the wealth, Swiss bank and asset management operations compared to its investment banking arm.
Unfortunately, the bank’s change in strategy failed to take effect and has left Credit Suisse needing to merge with UBS.