The process of strategic adjustment in the business of Credit Suissewhich was recently acquired by UBSis facing “ difficult decisions“, according to statements by the CEO of UBS, Sergio Ermotti.
The banker refers to thea significant reduction carried out in investment banking during his previous tenure at UBS.
In an article published in the Swiss newspaper ‘Tages-Anzeiger‘, Ermotti acknowledges that the real challenge “just beginning” and stresses that while UBS’s prospects are better than ever, it would have been desirable that the circumstances of the acquisition were different.
The executive sums up the task ahead as “demanding” and that it will require time, in addition to the need to take “difficult decisions”. Ermotti emphasizes that one must carefully reflect on what will happen with the Swiss business of Credit Suisse.
The transaction data
The acquisition of Credit Suisse by UBS was completed last Monday after almost three months of uncertainty since the Swiss authorities intervened and agreed the biggest bank merger in Europe since the 2008 financial crisis.
This transaction marks the end of the 167-year history of Credit Suisse and gives rise to a new banking giant whose consolidated financial results for the second quarter of 2023 will be published on August 31, 2023.
Before the completion of the transaction, the Government of Switzerland and UBS signed an agreement in which the public coffers will cover up to 9,000 million of Swiss francs (9,256 million euros) in possible losses of a portfolio of Credit Suisse assets after the acquisition.
This public guarantee will only be effective if the losses derived from such assets exceed 5,000 million Swiss francs (5,142 million euros), and will be limited to a maximum of 9,000 million francs.
The European Comission unconditionally approved the merger between UBS and Credit Suisse on May 25, after the collapse of the latter, when verifying that the operation will not generate competition problems in the European Economic Area (EEE).
Source: Ambito
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