Photo Credit: A Credit Suisse Group AG office building at night in Bern, Switzerland, on Wednesday, March 15, 2023. Switzerland's central bank and financial regulator said Credit Suisse Group AG will receive a liquidity backstop if needed, in a show of support aimed at restoring confidence in the troubled lender after its shares slumped by a record amount. Photographer: Stefan Wermuth/Bloomberg
UBS is buying Credit Suisse in bid to halt banking crisis.
The Winner - UBS
Photo Credit: The UBS Group AG logo in Zurich, Switzerland, on Sunday, March 19, 2023. Swiss authorities plan to change the country’s laws to bypass a shareholder vote on the transaction as they rush to finalize a deal before Monday. Photographer: Pascal Mora/Bloomberg
UBS Group AG is the big winner in Credit Suisse Group AG’s crisis after a government-brokered deal to buy Credit Suisse for more than $3 Billion. This deal includes extensive guarantees and liquidity provisions.
Photo Credit: The UBS Group AG headquarters in Zurich, Switzerland, on March 19. Photographer: Pascal Mora/Bloomberg
UBS will see its wealth and asset management's invested assets soar to about $5 Trillion.
Photo Credit: Canva
Though UBS CEO Ralph Hamers and his team will have plenty of work on their plate with this deal, they will have 56 Billion Francs of badwill to help cover any write-downs.
They will also have 9 Billion Francs worth of guarantees from the Swiss government to cover some losses. UBS can also access a huge liquidity line from the central bank.
Photo Credit: Source: Claudio Schwarz on Unsplash
The Many Losers
Photo Credit: Down arrow. (Photo: Ussama Azam/Unsplash)
The Saudi National Bank lost 1.1 Billion Francs in less than 15 weeks from when it bought its stake in Credit Suisse’s latest capital raise and became the Swiss bank’s largest shareholder.
Photo Credit: The KAFD World Trade Center, Riyadh Bank skyscraper office building, Public Investment Fund (PIF) tower, and the Saudi National Bank (SNB) headquarters, left to right, beyond the King Abdullah Financial District Conference Center in the King Abdullah Financial District (KAFD) in Riyadh, Saudi Arabia, on Tuesday, Dec. 6, 2022. The Saudi Arabian tourism ministry is targeting 12 million foreign tourists this year, with tourism on track to contribute about 4% of economic output, Tourism Minister Ahmed Al Khateeb said. Photographer: Maya Siddiqui/Bloomberg
The Qatar Investment Authority is Credit Suisse’s second-biggest holder and also owned the firm’s AT1 bonds in the past that were written to zero in the deal.
Photo Credit: Source: https://ir.linkedin.com/company/qatar-investment-authority?trk=public_profile_experience-item_profile-section-card_subtitle-click
Credit Suisse’s shareholders will not get to vote on this deal after Switzerland made changes in its regulations to rush the merger through.
Photo Credit: UBS Group AG and Credit Suisse Group AG are opposed to a forced combination, even as scenario planning for a government-orchestrated tie-up continues, according to people with knowledge of the matter. Bloomberg’s Sonali Basak reports. Source: Bloomberg
Credit Suisse CEO Ulrich Koerner is expected to quit after inheriting a broken bank that he couldn’t revive from a crisis of confidence.
Photo Credit: Ulrich Koerner Photographer: Hollie Adams/Bloomberg
Michael Klein’s dream of building a new CS First Boston as a spin-off may not be fulfilled after the UBS deal as UBS Chairman Colm Kelleher indicated that they were happy with UBS’ own investment bank and planned to cut back Credit Suisse’s substantially.
Photo Credit: Michael Klein Photographer: Andrew Harrer/Bloomberg
The Swiss regulator will impose losses on $17 Billion of high-risk Additional Tier 1 (AT1) bonds that are a portion of a buffer of debt and equity aimed to prevent taxpayers from having to bear the brunt of a bank’s collapse.
Photo Credit: The entrance to the Credit Suisse Group AG office tower in Zurich, Switzerland, on Monday, March 20, 2023. UBS Group AG shares slumped Monday as investors digested the news of its historic acquisition of rival Credit Suisse and began to assess the job of integrating the troubled Swiss lender. Photographer: Pascal Mora/Bloomberg
The Swiss government had to provide guaranteed worth billions of Francs to UBS. Moreover, to facilitate the deal, the central bank was forced to put taxpayers at risk and provide extensive liquidity backstops.
Photo Credit: WATCH: UBS Chairman Colm Kelleher announces details of the firm’s agreement to buy Credit Suisse.Source: Bloomberg