Credit Suisse Takeover ends 167 years as independent bank
ALBAWABA – Multinational investment bank UBS completed the acquisition of Credit Suisse early on Monday, sealing the biggest merger in banking since the 2008 financial crisis, according to Bloomberg.
The merger resulted in the formation of a giant Swiss bank, with a balance sheet of $1.6 trillion, and a global wealth-management titan, Reuters reported.
Notably, Credit Suisse existed for 167 years as an independent bank.
An open letter published Monday announced the end of an era for Credit Suisse, and the beginning of a new one, featuring thousands of job cuts, Bloomberg highlighted.
The deal came after UBS finalized negotiations with the Swiss government over a $10 billion guarantee against potential losses on Credit Suisse assets.
The acquisition was agreed in March as an emergency rescue measure brokered by the government.
UBS had little time to conduct their due diligence and Credit Suisse had “hard-to-value” assets in its ledgers, as per Bloomberg. Hence, the government’s involvement was reportedly indispensable.
The government agreed, on Friday, to cover losses on a specific portfolio of Credit Suisse assets, at about 3 percent of the merged banks’ combined assets, the New York-based news agency said.
Shares of UBS rose 0.5 percent at 9:17 a.m. in Zurich trading.
The stock has gained 6.3 percent this year, trailing the 8.5 percent increase in the Stoxx 600 Banks Index.
Shares of Credit Suisse will no longer trade starting Tuesday, Bloomberg confirmed.
Meanwhile, Credit Suisse will continue to operate with its own branches and subsidiaries “pending further integration,” UBS said Monday.
