UBS Resolves Guarantees Related to CS Acquisition
Published: Friday, Aug 11th 2023, 13:00
Updated At: Friday, Oct 13th 2023, 14:12
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The UBS has announced that it is ending all state guarantees related to the takeover of Credit Suisse. This decision was made after a thorough review of the problematic parts of the CS portfolio, known as the "Non-Core Assets". The guarantee of 9 billion francs with the Swiss government will be voluntarily dissolved. The UBS has also terminated the agreement with the Swiss National Bank for liquidity assistance loans of up to 100 billion francs with a federal guarantee. The Credit Suisse has fully repaid the so-called ELA+ loans of 50 billion francs to the SNB. The Swiss government and taxpayers can breathe a sigh of relief as the UBS has taken this step voluntarily. Finance Minister Karin Keller-Sutter expressed her satisfaction at the move and noted that the state had taken on guarantees of 109 billion francs, but no money had been spent. The agreement has been beneficial for the state and SNB, with the federal government receiving fees of 40 million francs, as well as payments of around 160 million francs from the provision and risk premiums of the state-guaranteed liquidity loan. The UBS has incurred costs of around 730 million francs. The state guarantees and liquidity assistance were granted in March as part of the takeover of the heavily indebted Credit Suisse. The move has been welcomed by the government and investors alike, as it shows that the risk profile of the new UBS is better than expected. The UBS will now focus on the successful implementation of the integration of Credit Suisse. The impact on jobs at the new bank will be revealed when the UBS publishes its half-year results on August 31.nnnnnnnn
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