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Right on schedule, UBS (NYSE:UBS) has completed its $3.25B deal to buy troubled rival Credit Suisse (CS), close to two months after the deal was brokered by the Swiss government to avoid the smaller bank’s bankruptcy.
Pending further integration, UBS (UBS) will manage two separate banks – UBS AG and Credit Suisse AG. UBS’ (UBS) board and executive team will oversee the consolidated group.
UBS (UBS) is also imposing strict curbs on Credit Suisse (CS) bankers to address 11 financial and 12 non-financial risks, the Financial Times reported citing unnamed sources.
These include a ban on new clients from high-risk countries such as Afghanistan and Russia, as well as launching new products without UBS (UBS) managers’ approval. Ukrainian politicians and state-run entities will also be blocked.
UBS (UBS) expects its CET1 capital ratio to be ~14% in Q2 and to remain around that level throughout the year. Credit Suisse’s (CS) operating losses and restructuring charges are expected to be offset by reductions in risk-weighted assets.
The last trading day of Credit Suisse shares on the SIX Swiss Exchange, which were up 1.2% at the time of writing, is June 12. Credit Suisse (CS) will no longer be traded on NYSE.
Over in the U.S., confidence in regional banking seems to be picking up. The number of regional bank insiders buying their own companies’ shares reached a three-year high during Q2.
