UBS says Credit Suisse takeover ‘significant milestone’

NurPhoto/Vernon Yuen

The chairman of UBS told the bank’s annual shareholder meeting on Wednesday that the takeover of rival Credit Suisse was a significant milestone for Switzerland and for the global financial industry.

Describing the transaction as “the first merger of two globally systematically important banks”, Colm Kelleher said it “means a new beginning and huge opportunities ahead for the combined bank and for the Swiss financial centre as a whole.”

Kelleher addressed shareholders for the fist time since the announcement of the takeover, urgently engineered and pushed through by the Swiss authorities last month.

Outlining UBS’s strategy, Kelleher said the Credit Suisse takeover would help the bank to deliver value to the Swiss economy and accelerate its strategic plans to expand its position as the leading wealth manager, particularly through growth in the US and Asia.

Last month Swiss authorities announced that UBS would buy Credit Suisse in a shotgun merger to stem further banking turmoil after the smaller lender had come to the brink of collapse.

After a run on deposits, the Swiss government had turned to UBS, which agreed to buy Credit Suisse for 3 billion Swiss francs ($3.3 billion), while the Alpine state put up more than 200 billion francs of support and guarantees.

The move angered not only shareholders but many in Switzerland. A survey by political research firm gfs.bern found a majority of Swiss did not support the deal.

For 2022 UBS reported a net profit of $7.6 billion and strong inflows in wealth management, the company’s flagship division.

Now the bank is looking at how to navigate the mammoth task of integrating Credit Suisse, the success of which Switzerland depends on, without undermining its strengths.

It has already taken the first steps. Last week UBS announced it had rehired Sergio Ermotti as chief executive to steer the massive takeover – a surprise move to take advantage of the Swiss banker’s experience rebuilding the bank after the global financial crisis.

The bank’s annual general meeting came a day after executives at Credit Suisse faced their own shareholders and chairman Axel Lehmann apologised for leading the bank to the verge of bankruptcy.