UBS completes Credit Suisse takeover

UBS finalised the takeover of its former rival Credit Suisse on Monday, clearing the way for the Herculean task of integrating two of the world’s most important banks.

UBS, Switzerland’s leading bank, was forced into the marriage on March 19 to prevent its closest domestic rival from going under -- which potentially could have had catastrophic consequences for the global financial system.

“UBS has completed the acquisition of Credit Suisse today, crossing an important milestone,” the bank announced. “Credit Suisse Group AG has been merged into UBS Group AG and the combined entity will operate as a consolidated banking group.”

UBS chairman Colm Kelleher said he was pleased to have closed the transaction in under 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,” he said.

The technically- and politically-complex merger has created a megabank bigger than anything Switzerland has seen before -- and its size has some politicians worried, fearing it could not be rescued if it too got into trouble.

No other option

“We consider the merger to be a massive task with substantial executions risks,” said ING senior sector strategist Suvi Platerink Kosonen.

For Thomas Jordan, chairman of Switzerland’s central bank, there was no other solution.

“Of course, it’s a pity there is only one (big bank) left. But I am sure that if the takeover by UBS hadn’t succeeded, there would have been an international financial crisis,” the Swiss National Bank chief told the SonntagsZeitung weekly newspaper.

UBS chief executive Sergio Ermotti said Monday that “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.”

But he warned Friday that the coming months are likely to be “bumpy”, saying the operation would require “waves” of difficult decisions, particularly regarding employment.

At the end of 2022, the two giants had around 120,000 employees worldwide, including 37,000 in Switzerland.

Ermotti told public broadcaster SRF that around 10 per cent of the Credit Suisse workforce had left in recent months. “It helps in part to mitigate the social costs a bit, which we’re pleased about,” he said, while adding that it showed there was competition in the sector, and “people who are willing to hire employees”.

For the time being, the two banks will continue to operate separately under the UBS umbrella. But UBS has already created a new board of directors for certain Credit Suisse operations, headed by current UBS vice-chairman Lukas Gaehwiler.