Due to the acquisition of Credit Suisse for USD 3.2 billion, UBS has a likelihood to climb the ranks of worldwide megabanks.
UBS isn’t any stranger to blockbuster mergers. The fashionable company consists of greater than 370 legacy firms, including former domestic rivals. Amid the great wars, Switzerland has remained stable and neutral, becoming a refuge for global wealth.
Today, international wealth management is at the heart of UBS’s business. With over $5 trillion in post-merger invested assets, greater than half of the bank’s clients are based in the United States. Experts consider that is as a consequence of the exceptional level of discretion offered by Swiss law. Bankers in Switzerland are required to guard a variety of customer data, even under pressure from foreign authorities.
“You possibly can access their operations in Singapore, Latest York, more exotic locations. But in essence, they may not be subject to political influence because the Swiss government leaves them alone, or so it seems,” he said. Nicolas Véron, senior lecturer at each the Peterson Institute for International Economics in Washington and the Bruegel think tank in Brussels.
Lately, each UBS and Credit Suisse have faced pressure from US authorities to stop what have been criticized as questionable business practices. For instance, in 2010, 1000’s of cases of misconduct were detected at UBS internationally rate of interest manipulation probe. Moreover, US senators say Credit Suisse kept accounts linked to Nazi clients only in 2020
Global regulators have nervous for years that banks like UBS have turn into too big to fail. The sudden and rapid flight of depositors from Credit Suisse revived these fears. The Swiss National Bank has pledged greater than $100 billion in liquidity support for the rapid takeover of Credit Suisse by broker UBS.
In the transaction, Credit Suisse shareholders expect to exchange 22.48 shares for 1 UBS share. Some bondholders plan to challenge the deal in court.
“Broadly speaking, the Swiss government mainly imposed losses on Credit Suisse’s creditors and shareholders,” Véron said.
UBS Group AG said the acquisition could make the bank more competitive globally and that it was prepared to administer this increased complexity.
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