UBS said Monday that it has completed the takeover of Credit Suisse, its struggling rival. The deal will see UBS form a Swiss banking powerhouse with a balance sheet of $1.6 trillion, a 120,000 workforce, and increased strength in wealth management.
UBS CEO Sergio Ermotti and Chairman Colm Kelleher said in an open letter issued in Swiss newspapers that it “is the start of a new chapter for UBS, Switzerland as a financial centre and the global financial industry.”
On March 19, UBS agreed to acquire Credit Suisse for a cut price of 3 billion Swiss francs in stock and up to five billion Swiss francs in assumed losses. The deal was part of a rescue that Swiss authorities directed to prevent customer confidence from collapsing and taking down the country’s second-biggest bank.
The move by UBS to acquire Credit Suisse represents the most significant banking deal since the 2008 global financial crisis. Ermotti and Kelleher added that there are challenges but also “many opportunities” for employees, shareholders, clients, and Switzerland itself.
The newly created banking giant will oversee $5 trillion of assets, meaning UBS will now take a leading position in key markets. It also Credit Suisse’s 167-year history has come to an end.
While it currently has a significant workforce, UBS said it will be cutting jobs to reduce costs.
The Financial Times, citing people with knowledge of the matter, reported on Sunday that UBS will impose strict restrictions on Credit Suisse bankers, such as banning new clients from high-risk countries and on complex financial products.
