According to an announcement by the banking group UBS, reported by Reuters on June 12, the takeover of Credit Suisse bank will soon be official. As a reminder, Credit Suisse has regained its liquidity after receiving emergency intervention from the state.
The takeover is pending registration, which will include actions that the US Securities and Exchange Commission (SEC) will declare effective, along with other remaining closing conditions.
The merger of UBS Group with Credit Suisse Group has created a new banking giant with a balance sheet of $1.6 trillion.
As one of the leading Swiss banks, UBS has agreed to pay up to $3.37 billion and assume up to 5 billion francs of the losses of its smaller Swiss rival, Credit Suisse.
UBS further stated that the shares of Credit Suisse and its American Depositary Shares (ADS) would be delisted from trading on the Swiss Stock Exchange and the New York Stock Exchange.
As part of the acquisition, shareholders of Credit Suisse will receive one UBS share for every 22.48 shares of Credit Suisse they hold.
This merger, the biggest in the banking industry since the global financial crisis, will create a group overseeing $5 trillion in assets. It will give UBS a leading position in key markets that would otherwise take years to achieve.
This megabank will employ 120,000 people worldwide.
Credit Suisse Liquid Again Thanks to State Intervention
When Credit Suisse Bank faced cash outflows in March of this year, the Swiss authorities stepped in to provide assistance. Consequently, we now have precise information about the amount of money the bank borrowed.
According to reports obtained by Reuters, the bank borrowed 70 billion Swiss francs as part of the 100 billion francs ($151.80 billion) scheme. Additionally, according to Karin Keller-Sutter, the Swiss Minister of Finance, it is certain that Credit Suisse has fully repaid the borrowed funds.
In its first-quarter report, Credit Suisse stated that it utilized funds from the Swiss National Bank (SNB), including loans backed by default guarantees.
Furthermore, we are aware that the loans from the SNB amounted to 108 billion Swiss francs after the bank repaid 60 billion Swiss francs in the first quarter.