Swiss bank UBS on Friday voluntarily ended receiving state and central bank support for the takeover of troubled Credit Suisse.
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When UBS, Switzerland’s largest bank, agreed in mid-March to take over struggling Credit Suisse, Switzerland’s second-largest financial institution, for three billion francs (3.02 billion euros), the Swiss central bank provided 100 billion francs (101.4 billion euros) extraordinary liquidity assistance to both banks.
UBS was also provided with up to nine billion francs as protection against potential losses from the sale of Credit Suisse assets, as UBS had little time to familiarize itself with Credit Suisse’s assets during the takeover negotiations.
Now that UBS, which completed its takeover of Credit Suisse on June 12, has seen the assets of the bank it has taken over, it has concluded that government support is no longer needed, asking on Friday to “voluntarily terminate” the previous agreements.
UBS will pay EUR 40 million in compensation for the received state aid.
UBS also announced that Credit Suisse has fully repaid additional liquidity support loans granted by the central bank.
The Swiss central bank informed on Friday that 168 billion francs were paid in liquidity support, stressing that the amount of support has been fully repaid.
“With Credit Suisse coming under the management of UBS, a solution was found to ensure financial stability and protect the Swiss economy in such an exceptional situation,” the Swiss central bank emphasized.
It has already been announced that the Swiss financial regulator FINMA has started an investigation into the possible responsibility of Credit Suisse’s management, leading the company to a crisis, while the latest survey data show that the majority of Swiss do not support the merger of the two banks and blame Credit Suisse’s management.
Both UBS and Credit Suisse are among 30 banks in the world considered too big to fail.
The bank was involved in several scandals before its share price plummeted on March 15 due to the refusal of its largest shareholder – the Saudi National Bank – to buy more Credit Suisse shares.
Credit Suisse borrowed 50 billion francs (51.4 billion euros) from the country’s central bank, but it failed to restore confidence in the bank.
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2023-08-11 12:26:16
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