UBS completes take-over of Credit Suisse Bank: bought the bank for $3.2 billion, UBS’s balance sheet will be $1.6 trillion.
Switzerland’s largest bank UBS Group AG has completed the take-over of Credit Suisse Bank. Amid the banking crisis, the country’s second largest private lender UBS has bought Credit Suisse for $3.2 billion.
The world’s largest banking deal was announced jointly by UBS Chief Executive Sergio Ermotti and Chairman Kom Kelleher on Monday (June 12). He said that this acquisition will open many new opportunities for the bank’s customers, employees, shareholders as well as for the economy of Switzerland as a whole. However, with this many new challenges will also arise.
This is the beginning of a new chapter for the bank: UBS
On this occasion, an open letter was also issued by UBS, which states that this is the beginning of a new chapter for the bank, due to which Switzerland will emerge as the most influential financial center of the global financial industry.
It has also been said in the open letter that UBS will successfully complete the process and associated challenges of this huge takeover. With this acquisition, Credit Suisse’s 167-year-old history as a giant bank also came to an end. The take-over, which is one of the largest deals in the history of the global banking industry, will further strengthen UBS’s dominance in the international financial markets.
UBS’s balance sheet will be $ 1.6 trillion
How big the business of UBS will become after this take-over can be gauged from the fact that the size of its balance sheet will be $1.6 trillion i.e. around Rs 132 lakh crore. Whereas after the take-over, the value of the bank’s Asset Under Management (AUM) will be more than $ 5 trillion i.e. Rs 412 lakh crore.
Total 1 lakh 20 thousand employees in both banks
Taking both UBS and Credit Suisse banks together, around 1 lakh 20 thousand employees work for them all over the world. However, UBS has said that they will cut the workforce to reduce costs. UBS Group AG had decided to take over the troubled Credit Suisse on March 19 this year. The deal was done on the basis of a valuation of 3 billion Swiss francs i.e. $3.32 billion.
Apart from this, UBS has also suffered a potential loss of around 5 billion francs in this deal. The Swiss authorities have also supported this deal to bail out Switzerland’s second largest bank from the crisis and restore customer confidence.
Swiss regulator Swiss National Bank (SNB) played a key role in the deal between UBS and Credit Suisse Bank. The Swiss government has also supported UBS in this deal. The Swiss government has given a guarantee cover of 9 billion francs i.e. $9.7 billion (Rs 80 thousand crore) to UBS for the risks involved in the acquisition of Credit Suisse.
For this deal of UBS and Credit Suisse Bank, the need for the permission of the stakeholders has also been abolished. To support the purchase of Credit Suisse Bank, the Swiss National Bank has also given a loan of 100 billion Swiss francs i.e. $ 108 billion (Rs 8.91 lakh crore) to UBS.
